Citicorp and Travelers Group expect to cut 5% of their combined work force by the end of this year-almost 8,000 employees-as they seek $1 billion in cost savings with their merger, analysts said Thursday.

The cuts would most likely come from each company's consumer operations, but more heavily from Citicorp's side, the analysts said.

A spokesman for Citi would not confirm the 5% number but said, "it would not be unreasonable."

"We do expect cuts of redundancies after the merger is approved," said John M. Morris, the spokesman.

When they announced their merger in April, both companies emphasized the revenue-generating potential of the proposed Citigroup, and said they expected $1 billion in "synergies" from cross-selling products. Cost savings would play a smaller role.

But according to analysts, Citicorp and Travelers have recently paid more attention to cost savings.

Heidi G. Miller, Travelers' chief financial officer who would assume that role at the new Citigroup, told analysts in August that the companies expected to see $1 billion in after-tax cost savings alone. Ms. Miller also said more staff cuts are possible in 1999.

"They have been saying that the potential for cost savings is more than we thought," said Ronald Mandle, an analyst at Sanford Bernstein & Co.

Analysts said Citicorp's consumer operations still have some fat that could be trimmed despite an $889 million restructuring program announced last October that cut 7,500 jobs from Citi's back-office operations and technology group. The newest cuts would be in addition to that restructuring, which is half complete.

"There is significant cost savings opportunity in Citicorp's consumer bank," wrote George Bicher, an analyst at BT Alex. Brown, in a research note Thursday. Mr. Bicher added that expected cost savings with the merger "would also include a scale-back in spending on alternative technologies."

Citicorp and Travelers have been working on integration issues even as they await approval from the Federal Reserve Board. In recent weeks Citicorp dismissed one-third of the employees in its fixed-income trading and research group, which will be folded into Travelers' Salomon Smith Barney unit.

Citicorp currently has 93,700 employees, and Travelers has 65,600.

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