Citi to Lay Off 10,000, Raise Credit Card Rates

Citigroup, seeking profitability after suffering net losses of $20 billion over the past year, is laying off at least 10,000 employees worldwide and raising rates on some credit card holders, the Wall Street Journal reports. Officials were told to trim employee compensation budgets by 25%, allowing managers to minimize firings by cutting higher-paid bankers and traders from payrolls.

The moves come amid reports that directors want to replace Sir Win Bischoff as chairman. Citi’s credit card portfolio includes 54 million active accounts, but the financial downturn has swamped the unit. It posted a $902 million loss in the third quarter, compared to a $1.4 billion profit the previous year. The 3-point rate increase, which will hit about 20% of customers, follows a similar move by American Express. (More financial crisis stories.)