Citigroup To Cut 50,000 Jobs After Posting $20 Billion Loss

[george]

Citigroup To Cut 50,000 Jobs After Posting $20 Billion Loss

Citigroup will reduce its global workforce by about 50,000 jobs, or about 15 percent, as the financial services giant tries to steady itself after recording losses of more than $20 billion over the past year, executives said Monday.

The company plans to sell a number of subsidiaries, including a massive back-office operation in India, and will terminate thousands of employees in the financial centers of New York and London. The extent of the job cuts roughly doubles the total that Citigroup had set as a target in an announcement last month.

Despite the cuts, executives said the company is not planning to change its basic business model. Citigroup, the largest and most international U.S. bank, will continue to sell a wide range of financial products and services around the world, though dominate relatively few of its markets.

"We will be the long-term winner in the industry," chief executive Vikram Pandit wrote in an e-mail to employees Monday.

At its peak last year, Citigroup employed about 375,000 people in a sprawling galaxy of businesses gathered over two decades of mergers.

But the financial crisis that began in the mortgage industry has taken a heavy toll on Citigroup. The company was a major mortgage lender; it also packaged loans for sale as securities and invested in those securities. It took heavy losses in each area and in dozens of related businesses.

As of Sept. 30, Citigroup employed about 352,000 people. That number will drop to about 300,000. The company plans to terminate about 22,000 employees and to sell business units that employ about 30,000 others. The termination process is underway and is expected to end by early next year. The company did not disclose how many of the affected employees are based in the United States.

In an interview with the Associated Press, Citi Chairman Winfried Bischoff said financial companies, including his, had added staff "injudiciously" during the good years and would have to change course by making job cuts that "will fall particularly heavily on London and New York."

Job losses in the financial, real estate and mortgage industries have added to the rising U.S. unemployment rate, which jumped to 6.5 percent in October from 5.5 percent in June.

Citigroup executives are under pressure to forgo bonuses this year after the company accepted an investment of $25 billion from the Treasury Department. Senior executives at Goldman Sachs Group said Sunday that they would not accept bonuses.

Citi said its board of directors would consider the issue early next year, a stance criticized by New York Attorney General Andrew M. Cuomo.

"After four consecutive quarterly losses, it seems only fair that top executives should shoulder their fair share of these difficult economic times," Cuomo said Monday in a statement. "It would send exactly the wrong message for Citigroup's top brass to collect bonuses while investors, taxpayers, and now Citigroup's own employees suffer."

Pandit took over the company late last year and was charged with returning it to profitability. At a meeting with employees yesterday, he said that Citigroup's revenue flow is strong. The problem is continued losses, particularly on mortgage-related investments. Over the past two years, the company has had to more than double, from $9.5 billion to $24 billion, the amount of money set aside to cover losses on loans. Pandit said the company is making progress on staunching losses and cutting expenses.

Citigroup has about $120 billion in capital, far more than the level required by regulators, allowing it to pursue acquisitions. The firm tried to buy Wachovia in September, only to watch Wells Fargo snatch the company from its grasp. Citigroup now is eyeing smaller banks, including Bethesda-based Chevy Chase Bank, according to people familiar with the situation.

-- Washington Post 2008-11-18

[henryalleman]

I simply don't trust Citibank already a long time.For instance in my home country they are under constant attack of consumer unions to give loans to people who they know thee are not able to pay their loans back. secondly there are few laws suits in progress by investment clubs, because they give wrongful and even false information to sell their financial products. In my home country many people lost a lot of money because of it. Its even not unluckily they have to refund that clients. Also citigroup is already saved a few times from a bankruptcy. just look how many billions Chinese and Arab investors put in this and last year to save them.

I had a retail business for many years and the credit card holders of Citibank where mostly the lower incomes and people living of welfare.

Almost every week I receive some junk mail where they try to sell me a loan. And when I read the small print they ask one of the highest interest on the market, but if you open an account its one of the worst.

As we say over here "I don't buy eggs from that farmer."

I'm not an financial expert but I have a s certain gut feeling that they will be one of the first victims of a foreseeable credit card crisis

[kiakaha]

for starters they could clear out the sathorn branch of citibank and replace the staff with Binobo apes(who work for free and would be better at their jobs)

[MJP]

I simply don't trust Citibank already a long time.For instance in my home country they are under constant attack of consumer unions to give loans to people who they know thee are not able to pay their loans back. secondly there are few laws suits in progress by investment clubs, because they give wrongful and even false information to sell their financial products. In my home country many people lost a lot of money because of it. Its even not unluckily they have to refund that clients. Also citigroup is already saved a few times from a bankruptcy. just look how many billions Chinese and Arab investors put in this and last year to save them.

I had a retail business for many years and the credit card holders of Citibank where mostly the lower incomes and people living of welfare.

Almost every week I receive some junk mail where they try to sell me a loan. And when I read the small print they ask one of the highest interest on the market, but if you open an account its one of the worst.

As we say over here "I don't buy eggs from that farmer."

I'm not an financial expert but I have a s certain gut feeling that they will be one of the first victims of a foreseeable credit card crisis

I'm sure there will be a banker type around here to tell us this means nothing but have a look at the first row in the table on page 7 (Schedule 1 30 Largest Unsecured Claims (Excluding Insiders) 1) of the attached document.

show_case_doc.pdf

[Rinrada]

Job Seekers allowance over "ere is now £60 quid a week so all these unemployed or rather On the Dole Ex Bankers will just have to follow the advice that they have been given out for years...Tighten your.....moneybelts..

60...thats about 3,000Bt.a week.......too much ...innit....

What goes round etc.....

[think_too_mut]

Bloated Citigroup has 23,000 programmers. Yes, 23 thousand.

Microsoft, Oracle, Cisco and Sun combined do not have that many developers.

We will see many web developers learning to say "would sir want fries with that" in Spanish, Indian and Mandarin.

[whiterussian]

http://www.telegraph.co.uk/finance/economi...lump.html"

Paul Volcker, the former chairman of the US Federal Reserve

"he said the arch-culprit was the bonus system that allowed bankers to draw forward "tremendous rewards" before the disastrous consequences of their actions became clear, as well as the new means of credit alchemy that let them slice and dice mortgage debt into packages that disguised risk.

HAHAHA out of work bankers. love it love it love it. Bastards made my home town completely unaffordable to non city workers over the last 10 years!

sadly, im sure they have huge nest eggs

[kingwillly]

Citigroup To Cut 50,000 Jobs After Posting $20 Billion Loss

Citigroup will reduce its global workforce by about 50,000 jobs, or about 15 percent, as the financial services giant tries to steady itself after recording losses of more than $20 billion over the past year, executives said Monday.

The company plans to sell a number of subsidiaries, including a massive back-office operation in India, and will terminate thousands of employees in the financial centers of New York and London. The extent of the job cuts roughly doubles the total that Citigroup had set as a target in an announcement last month.

Despite the cuts, executives said the company is not planning to change its basic business model. Citigroup, the largest and most international U.S. bank, will continue to sell a wide range of financial products and services around the world, though dominate relatively few of its markets.

"We will be the long-term winner in the industry," chief executive Vikram Pandit wrote in an e-mail to employees Monday.

At its peak last year, Citigroup employed about 375,000 people in a sprawling galaxy of businesses gathered over two decades of mergers.

But the financial crisis that began in the mortgage industry has taken a heavy toll on Citigroup. The company was a major mortgage lender; it also packaged loans for sale as securities and invested in those securities. It took heavy losses in each area and in dozens of related businesses.

As of Sept. 30, Citigroup employed about 352,000 people. That number will drop to about 300,000. The company plans to terminate about 22,000 employees and to sell business units that employ about 30,000 others. The termination process is underway and is expected to end by early next year. The company did not disclose how many of the affected employees are based in the United States.

In an interview with the Associated Press, Citi Chairman Winfried Bischoff said financial companies, including his, had added staff "injudiciously" during the good years and would have to change course by making job cuts that "will fall particularly heavily on London and New York."

Job losses in the financial, real estate and mortgage industries have added to the rising U.S. unemployment rate, which jumped to 6.5 percent in October from 5.5 percent in June.

Citigroup executives are under pressure to forgo bonuses this year after the company accepted an investment of $25 billion from the Treasury Department. Senior executives at Goldman Sachs Group said Sunday that they would not accept bonuses.

Citi said its board of directors would consider the issue early next year, a stance criticized by New York Attorney General Andrew M. Cuomo.

"After four consecutive quarterly losses, it seems only fair that top executives should shoulder their fair share of these difficult economic times," Cuomo said Monday in a statement. "It would send exactly the wrong message for Citigroup's top brass to collect bonuses while investors, taxpayers, and now Citigroup's own employees suffer."

Pandit took over the company late last year and was charged with returning it to profitability. At a meeting with employees yesterday, he said that Citigroup's revenue flow is strong. The problem is continued losses, particularly on mortgage-related investments. Over the past two years, the company has had to more than double, from $9.5 billion to $24 billion, the amount of money set aside to cover losses on loans. Pandit said the company is making progress on staunching losses and cutting expenses.

Citigroup has about $120 billion in capital, far more than the level required by regulators, allowing it to pursue acquisitions. The firm tried to buy Wachovia in September, only to watch Wells Fargo snatch the company from its grasp. Citigroup now is eyeing smaller banks, including Bethesda-based Chevy Chase Bank, according to people familiar with the situation.

-- Washington Post 2008-11-18

it is only the start, there is gonna be a lot more!