NEW YORK (AP) – Citigroup Inc., the nation’s largest financial institution, said Wednesday it will eliminate about 17,000 jobs, including nearly 6 percent of its workforce in New York City, as part of a companywide restructuring to reduce costs and improve profit.

Citigroup also said its plans include “shrinking the size of corporate centers,” several of which are in New York. But Robert Druskin, Citi’s chief operating officer, said: “We’re not talking about vacating major buildings.”

A Citigroup spokesman confirmed that 1,600 jobs in New York City and another 200 jobs elsewhere in New York state will be eliminated. Most of the New York City jobs are back office positions found in departments such as legal, human resources or finance.

Citigroup is the largest private sector employer in the city.

“Overall the economy is pretty strong so I wouldn’t expect to see any significant effect in the short-term,” Manhattan economist Greg Heym said. “The office market right now is very strong right now.”

Mr. Heym said about 3.7 million people work in New York City so the loss of jobs wouldn’t jolt its financial base.

“In the scope of things, that winds up not being a very big percentage but you hate to see any jobs go,” he said. “I’m sure they’re decent paying jobs.”

MayorBloomberg said he received a phone call from Citi on Tuesday night in which he was informed about the cuts. He was sorry to hear the company was cutting jobs but called it a “great corporate citizen.”

“I don’t think that when push comes to shove the impact on this city will be anything but long term good,” Mr. Bloomberg said. “Short term, a little bit of pain.”

A company spokesman said Citigroup would continue to hire. The cuts, he said, do not amount to a hiring freeze.

The total cuts amount to about 5 percent of the bank’s 327,000-strong work force, and the company also expects to move some 9,500 jobs to lower-cost locations.

The bank said in a statement that with previously announced information technology savings, the overhaul will save the New York-based bank about $2.1 billion in 2007, $3.7 billion in 2008 and $4.6 billion in 2009.

Citigroup executives have been under pressure from investors and analysts to get a handle on the bank’s burgeoning expenses, which grew 15 percent last year, twice the pace of revenue growth. As a result, its shares have lagged those of other big money center banks.

Charles Prince, the bank’s chairman and chief executive officer, said more expense cutbacks were possible, saying that Citi was adopting “a continuous approach to improving our efficiency – this is not a one-time effort.”

Mr. Druskin, who developed the restructuring plan over the past three months, said that the review “did not simply give the entire organization an arbitrary number to cut” but, instead, looked at each business operation and benchmarked it against peers.

Mr. Druskin said more jobs would be cut overseas than in the United States. He said the bank was more likely to rely on layoffs than on attrition to make sure the targeted positions were vacated.

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Associated Press Writer Sara Kugler contributed to this report.