Citigroup to cut 53,000 employees
Report: Big investment bank set to shrink its workforce to 300,000

updated 7:52 a.m. CT, Mon., Nov. 17, 2008


Citigroup will cut another 53,000 jobs in coming quarters, according to news reports Monday.

Citigroup’s Chief Executive Vikram Pandit is expected to announce the cuts at a company meeting Monday morning, CNBC reported. Souring economies and global credit conditions are leading the U.S. bank with the farthest reach worldwide to retrench.

The 53,000 job cuts are in addition to the 22,000 already being eliminated from Citigroup’s 375,000-member work force as of the end of 2007. The latest cuts bring the total job reductions to 20 percent. The job cuts are expected to be wrapped up in the first two months of 2009.

Cuts are expected to come from layoffs, the sale of units and attrition, CNBC said. Overall capital expenses may decline as much as 20 percent, and cuts are expected to be deep in investment banking, it said.

According to the Associated Press, Chairman Sir Win Bischoff said Monday at a Dubai conference, “What all of us have done, and perhaps injudiciously, we’ve added a lot of people over ... this very benign period.”
The cuts are Chief Executive Vikram Pandit’s most dramatic move yet to restore profitability and bolster a sagging share price. Last week, Citigroup’s stock fell into the single digits for the first time since Sanford “Sandy” Weill created the company in 1998 from the merger of Travelers Group Inc and Citicorp.

Pandit became chief executive last December and has faced much criticism from investors and others for failing to implement a workable turnaround plan for Citigroup.

The New York-based bank has lost more than $20 billion in the last year, hurt by bad bets on complex and risky debt, often tied to mortgages. Some analysts say the bank might not be profitable before 2010.
Pandit was holding a “town hall” meeting for employees Monday morning to discuss the bank’s plans.

Shares of Citigroup have fallen 68 percent this year, leaving the bank with a market value of only $51.9 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department’s bank bailout plan.
Citigroup was built principally by Weill, who ceded control to Pandit’s predecessor, Charles Prince, in 2003.

Analysts believe Citigroup never invested enough in technology or to make the bank’s parts work well together.

Its geographic diversity, including operations in more than 100 countries, is now also working against it as customers in such countries as Brazil, India and Mexico find it harder to keep up with their bills.

At the same time, Citigroup’s ability to grow at home is relatively limited. Last month, Wells Fargo & Co derailed Citigroup’s attempt to buy Wachovia Corp and its $418.8 billion of deposits.


Reuters and Associated Press contributed to this report.


http://www.msnbc.msn.com/id/27719673/