US bank Citigroup Inc has announced it is cutting 4,500 jobs in its latest effort to reduce costs.

The bank will take a $US400 million ($A391.56 million) charge in the fourth quarter as a result.

Citigroup’s CEO, Vikram Pandit, disclosed the job cuts at an investor conference on Tuesday.

“We have started a firm-wide reduction of headcount this quarter that will affect roughly 4500 positions and will be completed over the next few quarters,” Pandit told the conference.

The cuts represent about 1.5 per cent of its global workforce of 267,000.

But the layoffs will come at a stiff price for the company.

“We anticipate recording a charge in the fourth quarter for severance and other expenses related to this of approximately $US400 million,” Pandit said.

Pandit also warned that Citigroup will take a $US500 million hit to revenue from an accounting-related charge related to the changing value of its debt.

Citi and other banks took accounting gains in the third quarter because the cost of its debt fell in the bond market.

Since the bank could theoretically buy back its debt at a lower cost, accounting rules require that a gain be recorded.

Citi’s accounting gain in the third quarter totalled $US1.9 billion. Now, with corporate debt prices having recovered, Citi expects to take a hit to earnings in the fourth quarter.

Other banks have also been cutting staff in recent months. Last month, Swiss lender UBS told investors it is downsizing its investment bank to 16,000 people by 2016 from the current 18,000 as the bank tries to reduce its exposure to risk.

In September, Bank of America Corp said it would cut 30,000 jobs over the next few years.