Citi Plans Cuts in Office Space

NEW YORK CITY-Citigroup will consolidate space at its global headquarters, 399 Park Ave., and is looking to reduce its global real estate footprint by about 10.5 million square feet by year’s end, the financial services company said late Thursday. It’s part of “an ongoing global effort to substantially reduce expenses,” according to a statement.

Consolidation at 399 Park will take the form of cutting the executive floors from two to one and subleasing the remaining space. This is estimated to save $20 million over the life of the lease, according to Citigroup. The company says it will double the overall occupancy rate on the remaining floor at 399 Park–from 89 to 177–by creating smaller offices, increasing work station to office ratios and by utilizing “alternative work strategies.”

Worldwide, Citigroup says the outcome of the space consolidation will result in office density of 120 square feet per employee by the end of 2009–down from 132 square feet currently. “Over the last two quarters, reported premises and equipment expenses are down by $100 million, and Citi expects to realize significantly more savings” this year, according to a statement. “This consolidation is about cost savings and anything reported to the contrary is misleading.”