Citigroup Inc. today announced its plan to create a more streamlined organization, reduce expense growth, and drive future expansion.

The banking giant will eliminate approximately 17,000 positions. Citigroups’s total headcount will continue to grow in 2007, but the rate of growth, excluding acquisitions, new branches and other investments, will slow significantly.

The plan is a result of a structural expense review conducted over the past three months in every business, as well as the previously announced IT optimization program.

“In December, I charged Bob Druskin and our management team with a simple directive: eliminate organizational, technology, and administrative costs that do not contribute to our ability to efficiently deliver products and services to our clients,” said Charles Prince, chairman and CEO. “The recommendations that emerged from the structural expense review will improve business integration, as well as our ability to move quickly and seize new growth opportunities.”

With previously announced information technology savings, the structural expense review is expected to generate total expense savings of approximately US$2.1 billion in 2007, US$3.7 billion in 2008, and US$4.6 billion in 2009. The company will record a charge of US$1.38 billion pre-tax, US$871 million after-tax, in the first quarter of 2007, and additional charges totaling approximately US$200 million pre-tax over the subsequent quarters of 2007.

“We undertook this review to create a consistent level of best-in-class expense discipline in every part of our company,” said Druskin, COO, who managed the structural expense review process. “We did not simply give the entire organization an arbitrary number to cut. Instead, we looked objectively at each of our businesses and functions based on the opportunities we saw, benchmarking them against their peers.”

“Ultimately these changes will streamline Citi and make us leaner, more efficient, and better able to take advantage of high revenue opportunities,” Prince said.