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Vikram Pandit hired thousands of employees and invested billions of dollars as he sought to boost Citigroup Inc.’s revenue after fighting to survive the financial crisis. His successor Michael Corbat has another idea: cut.

Corbat will cut about 11,000 jobs, more than double the number Pandit announced in January, the New York-based company said yesterday in a statement. Citigroup also will shut branches and pull back from some emerging markets, a priority for Pandit before Chairman Michael O’Neill led his Oct. 16 ouster.

The move counters the strategy once pursued by Pandit, who added staff in 2011 and increased costs across consumer and investment banking in a bid to expand after the crisis. The cuts reflect the board’s change in tactics, one that probably helped spur Pandit’s departure, according to Marty Mosby, a Guggenheim Securities LLC analyst.

“It is a shift in priorities and a shift in magnitude,” Mosby said. “The board was more comfortable in maximizing profitability through efficiency initiatives in lieu of trying to aggressively seek incremental growth opportunities.”

Citigroup shares surged the most since January after yesterday’s announcement, climbing 6.3 percent to $36.46, the best performance in the KBW Bank Index of 24 U.S. lenders.

Pandit increased staff by 2.3 percent to 266,000 last year, as he pushed the lender to expand in India, China, Singapore and Mexico after repaying a $45 billion U.S. bailout. Costs climbed

7.5 percent to $50.9 billion.

Cutting Deeper

Even though the company announced 5,000 job cuts in January, O’Neill and the board probably want to focus purely on reducing costs and selling unwanted assets before pursuing more growth in emerging markets, Mosby said. They are cutting deeper than Pandit as stiffer capital rules and an industrywide slump in trading and investment banking pressure profit.

“Pandit was ready to shift his focus toward growth through market-share gains in an opportunistic time,” Mosby said. “That’s where O’Neill and the board parted ways. They were not comfortable that that would be the primary focus over the next 12 to 24 months.”

The lender will take a $1 billion charge this quarter to cover the 4.2 percent workforce reduction, which includes 1,900 jobs in a division that houses trading, investment banking and transaction services, Citigroup said. O’Neill, 66, and Corbat, 52, seek to improve productivity in markets businesses such as cash equities, where profit is being squeezed, according to the statement.

‘New Sheriffs’

“The new sheriffs are in town,” Gerard Cassidy, a Royal Bank of Canada analyst, said in an interview with Tom Keene on the “Bloomberg Surveillance” radio program. O’Neill led efforts to oust Pandit, and the new chairman played a major role in redirecting the bank’s strategy, Cassidy said. “His fingerprints are all over this,” he said.

Analysts including Cassidy, Wells Fargo & Co.’s Matt Burnell and Ed Najarian at International Strategy & Investment Group Inc. reiterated their buy ratings on Citigroup shares.

About 35 percent of fourth-quarter costs will be tied to eliminating 6,200 jobs in consumer banking, with operations set to be sold or scaled back in Pakistan, Paraguay, Romania, Turkey and Uruguay, according to the statement. Branches will be reduced in five other nations, including 44 in the U.S. Corbat also will cut about 2,600 jobs from operations, technology, human resources, legal and finance, according to the bank.

‘Unparalleled’ Network

“While we are committed to -- and our strategy continues to leverage -- our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns,” Corbat said in the statement.

The plan will save about $900 million next year, and projected annual savings will exceed $1.1 billion beginning in 2014, the company said. Annual revenue will drop by about $300 million, according to the forecast. The $1 billion charge this quarter is pretax, and $100 million more will come in the first half of next year.

Management is “rationalizing the business in an intelligent way,” Appaloosa Management LP CEO David Tepper said. Citigroup was Appaloosa’s third-biggest holding by market value as of Sept. 30, according to data compiled by Bloomberg.

Improving Efficiency

The job cuts are “part of a continuum” that began with the previous executives, Citigroup Chief Financial Officer John Gerspach said yesterday at an investor conference in New York. “What you can expect from the management team at Citi is a continuing examination of every one of our businesses,” he said. “We’ll constantly seek new areas to improve efficiency.”

In foreign markets, the bank must be “disciplined in how we come to market in each of these regions and thoughtful about how we’re allocating our finite resources,” Gerspach said.

The proposed cuts are small compared with those under way at Bank of America Corp., the second-biggest U.S. lender, according to Richard Staite, an analyst in London with Atlantic Equities LLP. The key to more profit at Citigroup lies with getting rid of unwanted assets in the Citi Holdings unit and the lender’s deferred tax asset, Staite wrote in a note to clients this morning.

Financial services firms have announced more than 300,000 job cuts globally since the start of 2011, data compiled by Bloomberg show. Bank of America, Goldman Sachs Group Inc., Morgan Stanley and UBS AG are among competitors focused on reducing costs.

BofA, UBS

Bank of America, based in Charlotte, North Carolina, is trimming about 30,000 positions after also taking a $45 billion bailout. Zurich-based UBS, Switzerland’s biggest bank, said Oct. 30 it will cut 10,000, and the stock has jumped 13 percent since the announcement.

Cost-cutting by investment banks needs to be severe as new capital rules designed to forestall a future credit crisis crimp bank finances, Sanford C. Bernstein analysts said last month. Firms must curtail pay and personnel, replacing some traders with computers, and dispose of almost a third of their trading-business assets to earn even half the returns they once made, the analysts wrote.

Citigroup’s staff climbed to 374,000 at the end of 2007, when Pandit, 55, became CEO, according to data compiled by Bloomberg. He then cut staff to 258,000 by Sept. 30, 2010, as he divested unwanted investments and subsidiaries. The bank repaid the $45 billion taxpayer bailout before the end of that year.

Latin America

Pandit then began adding staff as he recruited talent for investment banking while adding branches and employees in Asia and Latin America. Citigroup reported it employed 262,000 people at the end of September, the third most among U.S. banks, after Bank of America and Wells Fargo & Co., and about 2,000 more than JPMorgan Chase & Co.

Pandit, originally from Nagpur, India, sought to boost revenue from developing markets as economic growth in the U.S. and Europe stagnated.

“In fast-growing emerging markets, where standing still risks losing share, we had to invest just to keep up,” Pandit told shareholders in a letter earlier this year. Investments to “grow the client franchise” in Asia and Latin America rose by about $300 million in 2011, he wrote.

Corbat inherited one of Wall Street’s least productive workforces after Pandit left. Before yesterday’s announcement, the lender was on track to end the year as the only one of the six biggest U.S. banks with less revenue per employee than in 2005, according to an Oct. 25 Bloomberg analysis.

Steady Savings

Pandit was unlikely to lead Citigroup out of emerging markets after previously committing to them, said Staite, the Atlantic Equities analyst who recommends the lender’s shares. If he were still in charge, the bank probably would have introduced fewer and “more steady, incremental savings” than those announced yesterday, Staite said in an interview.

The bank had invested $3.9 billion last year in all of its businesses, including initiatives to meet regulatory requirements, modernize branches and boost spending on consumer marketing, Pandit said during a Jan. 17 conference call with analysts and investors. His strategy had been a wager that didn’t pay off as planned, Staite said.

“Vikram had invested heavily in the business back in 2010 and 2011 on the assumption of a stronger global economy,” Staite said. “That obviously hasn’t come through.”

Branch Network

Citigroup’s U.S. branch closings amount to about 4 percent of its North American branch network and include 13 across Pennsylvania, nine in Massachusetts and six in New Jersey, according to Catherine Pulley, a spokeswoman for the lender. The bank has opened 21 branches in the past 15 months and probably will open more next year, Pulley said.

Citi Holdings, the unit that contains about $171 billion of unwanted assets, will eliminate about 350 positions, the bank said. Most are related to branch closures in Greece and Spain, the company said.

The job cuts at Citi Holdings don’t go far enough to fix the unit, according to Charles Peabody, an analyst in New York with Portales Partners LLC. Efforts to quicken its disposal of assets are hampered by a lack of funding for potential buyers, and aggressive sales efforts could produce losses beyond the bank’s current reserves, Peabody wrote in a Nov. 13 note.

Citigroup also plans to shrink that division’s bonuses for this year by as much as 10 percent, two people with direct knowledge of the decisions said last week.

“At the end of the day, this looks to be nothing more than a branch rationalization and back-office efficiency story,” Peabody said yesterday.

Citigroup has a history of “trashing” its results in the fourth quarter to clean up expenses and other unusual charges, many of which should have been recognized in earlier quarters, Peabody said.

“It makes you wonder if you can trust the core earnings power of the company as depicted in the first three quarters of the year,” Peabody said.

(Updates with analyst’s comments beginning in 18th paragraph.)