Job cuts threaten Citi's expansion in Mass.

Bank details plans to eliminate 52,000 positions worldwide

Citigroup has 31 branches in the state and has been growing aggressively here. (Evan Richman/Globe Staff/file 2008)

Citigroup's new banking network in Massachusetts remains in limbo after company officials yesterday announced a new target of about 52,000 job reductions by next year, one of the biggest corporate cutbacks announced so far this year.

The New York banking giant had previously said it would shrink its worldwide workforce by 18,000 through the sale of units in India and Germany.

The cuts revealed yesterday will include about 25,000 layoffs, plus about 7,000 cuts by further sales of operations. Citigroup's goal is to lower employment to around 300,000 by the first half of next year.

In Massachusetts, Citigroup has 31 bank branches and about 1,500 employees. Other businesses here include wealth-management, investment banking, and corporate operations. In all, the company expects to reduce its peak employment of 375,000 people by about 20 percent.

While company officials do not yet know where the job reductions would come from, they will touch all Citigroup operations, a spokeswoman said.

The bank had been on a tear in Massachusetts, opening 24 branches in the last year alone. It had $691 million in total deposits here as of June 30, according to the most recent federal figures.

Banking analyst Nancy Bush predicted Citigroup would not sell off many retail branches, here or nationally, but rather will expand the branch network and maybe even buy others since this part of its business is relatively solid compared with the troubled investment banking and structured finance operations.

"They need domestic core deposits," she said.

However, community activists complain Citigroup has not followed through on its obligations to open new branches in minority neighborhoods such as Roxbury and Dorchester. Current branches are concentrated in wealthier neighborhoods and suburbs such as Hingham and Newton.

Thomas Callahan, executive director of the nonprofit Massachusetts Affordable Housing Alliance in Boston, said he and other activists brought up the matter during a recent meeting with Citigroup executives. But given the bank's financial problems, Callahan said, he and others are trying not to hold the company to strict deadlines.

"This is an extraordinary time, so I do think some limited, but not permanent, forbearance is appropriate" when judging the bank's pledges to expand, he said.

In a statement, Citigroup said it "takes its responsibilities under federal community lending rules very seriously and is committed to investing in and providing lending and services to all of Boston's communities. Consistent with our community obligations which are a significant priority for us, we will continue to consider community investment opportunities for the future."

One area that apparently will be spared is Citigroup's charitable presence. The bank's cuts will have no impact on the Citi Performing Arts Center, according to the center's spokesman, Joe Ganley. Citigroup purchased the naming rights to the former Wang Center for the Performing Arts for about $34 million two years ago.

Years of expansion and heavy investments in troubled mortgages have weakened Citigroup, which in October reported it had lost $10.4 billion through the first nine months of 2008 and had provisions of $21.5 billion for loan losses.

Citi and business partner State Street Corp. earlier this year sold their joint interest a big retirement-services division in Quincy to Dutch bank ING Group, for $900 million, which reduced Citi's total local workforce by about 900 people.

Ross Kerber can be reached at kerber@globe.com.