By — PBS News Hour PBS News Hour Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/business-july-dec08-citibank_11-17 Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Citigroup Plans to Slash Another 50,000 Jobs Economy Nov 17, 2008 1:50 PM EDT The workforce is being reduced by 20 percent from the company’s peak of 375,000 at the end of 2007. In October, Citi announced that it was eliminating about 22,000 jobs from that level. The total workforce reductions include thousands of jobs that will be lost when Citigroup completes the sale of Citi Global Services and its German retail banking business, the Associated Press reported. CEO Vikram Pandit discussed the plans, which were posted on the company’s Web site, at a town hall meeting with employees in New York. In the meeting, bank executives also said they want to shore up the bank’s capital base, cut risky positions and trim expenses by 16 percent to 19 percent to about $50 billion in 2009, according to the New York Times. Shortly before the town hall meeting in New York, Citigroup Chairman Win Bischoff said at a business forum in Dubai, United Arab Emirates, that it would be irresponsible for Citi and other companies not to look at staffing in the event of a prolonged economic downturn. “What all of us have done — and perhaps injudiciously — we’ve added a lot of people over … this very benign period,” Bischoff said. “If there is a reversion to the mean … those job losses will obviously fall particularly heavily on the financial sector,” he added. “Certainly they will fall particularly heavily on London and New York.” A Citigroup spokesman said that while certain regions and businesses might have higher concentrations of job cuts, they would generally be across the entire company and around the world. In his comments to the Associated Press, Bischoff did not rule out the likelihood that Citi’s leaders would go without bonuses this year — a move that would effectively amount to a substantial pay cut for the company’s executives. “Watch this space,” he said when asked about lost bonuses. On Sunday, Goldman Sachs Group Inc. said seven top executives, including Chief Executive Lloyd Blankfein, opted out of receiving cash or stock bonuses for 2008 amid the ongoing credit crisis. Citi shares fell in early-morning trading, but recovered most of the loss by midday. The company’s shares have been trading at 13-year lows. This week, the second-largest U.S. bank’s shares fell below $10 for the first time since Sanford “Sandy” Weill in 1998 created Citigroup from the merger of Travelers Group Inc with Citicorp. Citigroup is constrained from growing at home, and Wells Fargo & Co. last month derailed its attempt to buy Wachovia Corp and its $418.8 billion of deposits. Its market value is only about $52 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department’s new bank bailout plan. Citigroup has lost $20.3 billion in the last year, analysts expect it to lose money this quarter, and some analysts believe it may not be profitable in 2009. The bank was cobbled together principally by Weill, who ceded control to Prince in 2003. But analysts believe Citigroup never invested enough in technology or to make the bank’s disparate parts work well together. And Citigroup’s geographic diversity, including operations in more than 100 countries, is by some measures now a negative, as customers in Brazil, India and Mexico — like many in the United States — find it harder to keep up with their bills. Most of Citi’s job reductions would come through attrition or the sale of units, the bank said, meaning the actual number of layoffs could be less. The cuts would leave the bank with about 300,000 employees. Citigroup has reported four consecutive quarterly losses, including in $2.8 billion in the third quarter. Investment bankers are expected to bear the brunt of the losses at Citigroup because senior managers have been asked to reduce expenses significantly. But back-office functions, such as the bank’s legal and human resources divisions, are also expected to be hard hit. Monday’s announcement is only the latest bad news from a financial firm. Wall Street firms have announced more than 150,000 job cuts worldwide, but it could take months for the losses to show up in payroll data because workers still appear employed while they receive severance. We're not going anywhere. Stand up for truly independent, trusted news that you can count on! Donate now By — PBS News Hour PBS News Hour
The workforce is being reduced by 20 percent from the company’s peak of 375,000 at the end of 2007. In October, Citi announced that it was eliminating about 22,000 jobs from that level. The total workforce reductions include thousands of jobs that will be lost when Citigroup completes the sale of Citi Global Services and its German retail banking business, the Associated Press reported. CEO Vikram Pandit discussed the plans, which were posted on the company’s Web site, at a town hall meeting with employees in New York. In the meeting, bank executives also said they want to shore up the bank’s capital base, cut risky positions and trim expenses by 16 percent to 19 percent to about $50 billion in 2009, according to the New York Times. Shortly before the town hall meeting in New York, Citigroup Chairman Win Bischoff said at a business forum in Dubai, United Arab Emirates, that it would be irresponsible for Citi and other companies not to look at staffing in the event of a prolonged economic downturn. “What all of us have done — and perhaps injudiciously — we’ve added a lot of people over … this very benign period,” Bischoff said. “If there is a reversion to the mean … those job losses will obviously fall particularly heavily on the financial sector,” he added. “Certainly they will fall particularly heavily on London and New York.” A Citigroup spokesman said that while certain regions and businesses might have higher concentrations of job cuts, they would generally be across the entire company and around the world. In his comments to the Associated Press, Bischoff did not rule out the likelihood that Citi’s leaders would go without bonuses this year — a move that would effectively amount to a substantial pay cut for the company’s executives. “Watch this space,” he said when asked about lost bonuses. On Sunday, Goldman Sachs Group Inc. said seven top executives, including Chief Executive Lloyd Blankfein, opted out of receiving cash or stock bonuses for 2008 amid the ongoing credit crisis. Citi shares fell in early-morning trading, but recovered most of the loss by midday. The company’s shares have been trading at 13-year lows. This week, the second-largest U.S. bank’s shares fell below $10 for the first time since Sanford “Sandy” Weill in 1998 created Citigroup from the merger of Travelers Group Inc with Citicorp. Citigroup is constrained from growing at home, and Wells Fargo & Co. last month derailed its attempt to buy Wachovia Corp and its $418.8 billion of deposits. Its market value is only about $52 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department’s new bank bailout plan. Citigroup has lost $20.3 billion in the last year, analysts expect it to lose money this quarter, and some analysts believe it may not be profitable in 2009. The bank was cobbled together principally by Weill, who ceded control to Prince in 2003. But analysts believe Citigroup never invested enough in technology or to make the bank’s disparate parts work well together. And Citigroup’s geographic diversity, including operations in more than 100 countries, is by some measures now a negative, as customers in Brazil, India and Mexico — like many in the United States — find it harder to keep up with their bills. Most of Citi’s job reductions would come through attrition or the sale of units, the bank said, meaning the actual number of layoffs could be less. The cuts would leave the bank with about 300,000 employees. Citigroup has reported four consecutive quarterly losses, including in $2.8 billion in the third quarter. Investment bankers are expected to bear the brunt of the losses at Citigroup because senior managers have been asked to reduce expenses significantly. But back-office functions, such as the bank’s legal and human resources divisions, are also expected to be hard hit. Monday’s announcement is only the latest bad news from a financial firm. Wall Street firms have announced more than 150,000 job cuts worldwide, but it could take months for the losses to show up in payroll data because workers still appear employed while they receive severance. We're not going anywhere. Stand up for truly independent, trusted news that you can count on! Donate now