Citigroup is undertaking a worldwide restructuring of its call center operations as part of a streamlining process as it integrates its financial services businesses. The restructuring will involve cross-training call center agents to sell a wider variety of financial products.
Citigroup, New York, officially formed on October 8 of last year through the merger of Citicorp and Travelers Group, expects to save $680 million in 1999 and a total of $975 million by the end of 2000.
Worldwide, approximately 10,400 positions will be cut. Regional consolidation of call centers will account for a portion of the workforce reduction, while in some areas telemarketing jobs will be increased.
The company will add 700 positions in U.S. credit card telemarketing in areas where new customer segmentation and direct marketing initiatives have shown potential, officials said.
In some cases, Citibank call center agents are being cross-trained to sell insurance products from the Travelers Property Casualty insurance business, said Citigroup spokesman Jack Moore. Call centers that had traditionally handled Citibank's credit card operations have already sold approximately 3,000 auto and homeowner insurance policies, he noted.
Moore would not say in which regions call centers would be consolidated, but pointed out that 65 percent of the company's overall reductions will occur outside the United States. It was also not clear what percentage of the cost savings would come from the consolidation of call centers. Company officials said that consumer business initiatives would account for $525 million in savings. Those savings would come from consolidating call centers and back office functions, reducing management layers, restructuring sales forces, and overlapping product management groups.
The company's ability to realize savings from consolidating call centers would depend largely on the capacity at which the company's call centers were operating, noted an analyst.
“The real savings from consolidating call centers comes when they are under capacity. Otherwise you can eliminate some management and have a manager oversee two centers but there's not much more you can do,” said Mike Petsky, president of Winterberry Group, Inc., Manorville, NY. “I don't know how efficient they've been, but if they have a few centers that are 15 percent, 20 percent below capacity, they can consolidate and save some money.”
Cross-training, he added, would be feasible considering the similarities of the company's products.
“Outside of licenses to sell insurance, what they are doing is no different than what a third party call center provides,” Petsky said. “If we were talking about call centers taking catalog orders, that would be one thing, but if they are already selling financial products, it should be relatively easy to cross-train for other financial products. There are third party call centers specializing in financial products that do the same thing.”
The consolidations will not result in longer hold times or a less attention to customer service Moore said.
'The point of this is to build operating efficiencies as we implement integration,” he said.