The ax has fallen on Citigroup Inc.'s high-profile advanced development group, which in October was rechristened e-Citi to reflect its mission of "innovation and transformation."

The e-Citi unit-not immune to cutbacks throughout the company formed by the merger of Citicorp and Travelers Group-said 70 people in support functions would be laid off, mainly at its development center in Los Angeles.

The number is not big; many observers expect that 8,000 to 16,000 of Citigroup's 161,000 workers will leave as a result of merger-related restructuring.

The e-Citi layoffs may even be less than proportionate, amounting to about 6% of the unit's 1,200-member work force. A Citigroup spokeswoman put the layoffs in the context of "the overall restructuring initiative" announced in October 1997.

Under the leadership of corporate executive vice president Edward D. Horowitz, the advanced development group is a vehicle for achieving dominance via the Internet and other nontraditional delivery channels.

Mr. Horowitz, who left a senior technology post at Viacom Inc. in January 1997 to join Citicorp, has been as emphatic as anyone in the Citigroup hierarchy about the revenue-generating, as opposed to cost- cutting, motivation of the megamerger.

He has said that e-Citi enjoys the support of Citigroup co-chief executive officers John Reed and Sanford Weill, to whom Mr. Horowitz reports.

The technology executive has engineered several partnership deals to bolster Citigroup's on-line presence.

They include a co-marketing agreement with Virgin Group in the United Kingdom to offer customers Internet access, a prominent position on Netscape Communications Corp.'s Netcenter portal, and a project with the Mining Co. to develop on-line communities of interest.

Citigroup also has invested in Transpoint, the bill presentment and payment processing venture started by Microsoft Corp. and First Data Corp., and it partly owns Integrion Financial Network and Meca Software LLC.

"I don't want to be a technology company," Mr. Horowitz has said. "I want to be a commerce integration company and will go with the best of breed."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.