Citigroup Inc., in the midst of a massive cost-cutting initiative as it tries to right itself, has chosen yet another executive to handle the effort.
In an internal memo to senior managers Tuesday, Gary Crittenden, Citi's chief financial officer, wrote that Rob Beck, previously the co-head of its corporate mergers and acquisitions team, has been selected to succeed Carl Levinson, who retired last month.
The decision, which put a third person in charge of overhauling expense structures at the New York company in as many years, raised some questions about Citi's ability to trim costs and return to profitability when the person managing that strategy keeps changing.
"Usually, that kind of turnover is not a healthy sign," Bert Ely, the president of Ely & Co. in Alexandria, Va., said in an interview Wednesday. "It may be that it's an impossible job, but at the same time, at a company the size of Citi, cost cutting doesn't come down to one guy; it's a corporate-wide effort. So the loss of one person in and of itself is not make or break, but it may be a sign that a very tough job is only getting tougher and tougher."
Mr. Levinson, a 36-year Citi veteran, had managed its cost-reduction programs for roughly a year.
Last year Citi, which has posted four consecutive quarterly losses, announced a plan to shed $400 billion of assets before 2012 and cut 53,000 jobs. Last month it sold its German retail banking business to Credit Mutuel-CIC in Paris for $6.7 billion.
Citi said Mr. Levinson, 62, was not forced out as part of the plan to fold his team into another unit. Rather, "after 36 years with the company, Carl simply made the decision to retire," according to Michael Hanretta, a spokesman for the company.
A source close to Citi said Mr. Levinson, who had previously served as its chief executive of consumer lending, was "tired" and felt he needed to step away from the company.
Mr. Hanretta said the re-engineering head position held by Mr. Levinson was created when he took the job in January of last year. But for most of 2007, former chief operating officer Robert Druskin led a $10 billion cost-cutting initiative, a precursor to the current program, until he resigned in December of that year.
Analysts said that any executive position at Citi right now is sure to come with extraordinary pressure, and that the role Mr. Levinson left is not one many would kept for several years.
"He had been with the company so long, and with all they've gone through in the past year, he may have just said, 'I've had enough. Life's too short,' " Roger Lister, the chief credit officer of the financial institutions group at DBRS Ltd., said in an interview Wednesday.
In his memo, Mr. Crittenden said that Mr. Beck, 45, who has been at Citi since 1989, has worked on "numerous strategic transactions," including last month's divestiture in Germany. His previous jobs include head of corporate business planning and analysis, as well as head of global consumer strategy.
"As of the end of the third quarter of 2008 we reduced our expenses by 10% compared to the fourth quarter of 2007, and we released approximately $10 billion in capital through 21 successful divestitures," Mr. Crittenden wrote. "As we enter 2009, these priorities will again be critical and must be more integrated as we continue to streamline processes and business structures aligned to our strategy."
