The job cuts, chiefly in the corporate and investment banking operations, represent only a fraction of the firm's worldwide workforce of 230,000.
A Citigroup spokeswoman told Reuters that the reductions are part of an ongoing effort to cut costs.
They are a result of integrating some units after mergers, as well as reflecting the slump in the stockmarkets and a slowdown in trading, she said.
They will affect several offices round the world, which would mean layoffs in US cities, including New York, as well as in London and Asia.
Firms shed staff
Citigroup is the latest in a series of financial companies to cut staff as the US economy slows.
Last month, Charles Schwab, the world's biggest online broker, issued a profit warning and said it will cut between 11% and 13% of its staff to save costs.
Online broker Ameritrade has already cut its workforce by 9% and more financial firms are expected to follow.
In January Citigroup, which has financial services operations in more than 100 countries, reported a healthy jump in fourth quarter profits.
They rose 11% to $3.33 billion, from $3 billion in the 1999 fourth quarter.
But the slump in world stockmarkets hampered growth at its Salomon Smith Barney securities unit, which helps companies with new stock offerings and mergers.
Profits at this division fell 13%, to $716 million, amid an industry-wide slowdown, Citigroup said.
Citigroup shares closed down $2, or 4%, at $43.70 in trading on the New York stock exchange Tuesday.