NEW YORK, Nov. 17, 2008
Citigroup To Axe 53,000 Jobs Globally
Troubled Bank Will Eliminate 20 Percent Of Employees In Upcoming Quarters
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CEO Vikram Pandit told Citigroup employees this morning that the troubled bank's staff — already hit with thousands of layoffs — will be reduced by 20 percent, meaning another 53,000 employees will lose their jobs. (AP)
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The presentation of the company's plans, posted on the company's Web site, are being discussed by CEO Vikram Pandit at the company's town hall meeting in New York Monday with employees.
The company said total headcount is being reduced by 20 percent from its peak of 375,000 at the end of 2007; the company had already announced in October that it was eliminating about 22,000 jobs from those levels.
The New York-based bank has posted four straight quarterly losses, including a loss of $2.8 billion during the third quarter.
The presentation also says that the company is going into 2009 in a stronger position than in 2008, having significantly reduced risky assets, and securing a "very strong" capital position.
Citigroup added approximately $75 billion in assets since the third quarter of 2007, a third of which ($25 billion) came from selling preferred equity to the government via the Treasury Department's Congressionally-approved bailout program.
However, last week, Treasury Secretary Henry Paulson announced that, contrary to the original plans for the government's bailout, he would not purchase troubled assets from banks, for which Citibank (hard-hit by the mortgage crisis) had already been approved.
The presentation stated the global group had $2.050 trillion in total assets, and $750 billion in deposits.
The 53,000 job cuts are in addition to the 22,000 already being eliminated from Citigroup Inc.'s 375,000-member work force as of the end of 2007. The latest cuts bring the total job reductions to 20 percent.
Citibank is also reportedly set to raise interest rates on approximately one-fifth of its 54 million credit card customers.
Citi shares fell 42 cents, or 4.4 percent, to $9.10 in morning trading. The company's shares have been trading at 13-year lows.
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."
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.
Last year, Blankfein received total compensation of $54 million, according to calculations by The Associated Press, making him the sixth highest-paid CEO at a Standard & Poor's 500 company in 2007.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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- All hands on deck! All hands on deck! She is going down at the bow, abandon ship! abandon ship! Man the life boats. All hands on deck, this is not a drill, this is not a drill, man the life boats. Mayday mayday this is USS American we are taking on water and going down, Mayday mayday this the USS Americna we are taking on water and sinking, life boats are being deployed, we are abandoning ship at this time.
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- interesting that no one ever minds the store until they are in deep weeds, then they cut headcount and trim budgets. it''s true with every business be it banks, corporations, auto industry, health care, telecom, from federal, state, county, city governments and so forth. no one manages anymore.
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- CONGRESS MUST ACT NOW AND SHUT-DOWN THIS DERIVATIVES SCAM KRAP GARBAGE NOW!!!!!!!
posted by whitemale08
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Yes, and they know how to. The Commodities Modernization Act of 2000 provided certainty that products offered by banking institutions would not be regulated as futures contracts. Fast forward to 2008 and now we have a global financial meltdown.
This was never debated in the House or Senate. The main players of introducing this in the House were: Ewing (R-IL) Bliley (R-VA), Combest (R-TX), LaFalce (D-NY), Leach (R-IA).
In the Senate it was: Lugar (R-IN) Fitzgerald (R-IL), Gramm (R-TX), Hagel (R-NE), Harkin (D-IA), Johnson (D-SD).
These representatives and senators need to charge the way to repeal this Act, as well as the 1999 Gramm/Leahy/Bliley Act. - Reply to this comment
- Congress must take action NOW!!!!
They must shut-down the Derivatives Market (worthless krap) and throw these ''worthless assets'' (illiquid debt instrumenst of krap and garbage) into the dumpster where it belongs.
Then they have to bring into receivership the entire privately held Federal Reserve System and conduct bankruptcy proceedings to protect the banking functions of this country without bailing out over a Quadrillion in Derivatives krap (which is impossible anyways).
CONGRESS MUST ACT NOW AND SHUT-DOWN THIS DERIVATIVES SCAM KRAP GARBAGE NOW!!!!!!! - Reply to this comment
- hehehehhehe
Larouche is still around? - Reply to this comment
- The financial meltdown is due to deregulated risky bets (derivatives) made by the cowboys of the financial industry.
Seven top banks own 95% of derivatives. These 7 banks are: Chase, JP Morgan, Bank of America, Citibank, Banc One, First Union and Bank of New York.
Looks like we''''re in for a rocky ride!
Posted by perk235 at 10:02 PM : Nov 17, 2008,
Yeah! The problem I have with this why should my hard erned tax dollars be used to bail out these high rollers.
If I make a bad investment I do not get a bailout! Does anyone know where I can apply for one of those high roller jobs?
Can you imagine being able to make bad decisions that bankrupt your employer and you still recieve your golden parachute.
Seriously, where do you apply? I promise to make one less mistake than the person currently in that position? - Reply to this comment
- This is not over and it will not be over until we have total meltdown and maby we can come back from the pitts of hell that the republicans have put us in i hope it''s 200yrs before the republicans see the light of day 2010 every republican in office now needs to go in 2010.
- Reply to this comment
- The financial meltdown is due to deregulated risky bets (derivatives) made by the cowboys of the financial industry.
Seven top banks own 95% of derivatives. These 7 banks are: Chase, JP Morgan, Bank of America, Citibank, Banc One, First Union and Bank of New York.
Looks like we''re in for a rocky ride! - Reply to this comment
- Let''s see how much more money we can waste, i.e., African Aids project, space shuttle missions, refurnishing the Int'' Space Station, Mars rover broke down on an Martian highway, bailing AIG, GM, Ford, ect., man this country has money to blow.
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- Pretty bad when a company that charges upwards of 20-30% interest on credit cards can''t make ends meet. Talk about pathetic management, and these are the jokers our tax money is going to bail out? I say give the money to Detroit. At least we''ll get a low mileage hybrid out of the deal. Citi will just raise our interest rates and give their worthless CEOs more unearned bonuses.
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- WHAT WILL IT TAKE FOR YOU IDIOTS ON WALL STREET TO UNDERSTAND THAT YOUR PARASITICAL FINANCIAL SYSTEM IS DEAD!!!!!!!!
CONGRESS MUST SHUT-DOWN IMMEDIATELY THE PRIVATE FEDERAL RESERVE SYSTEM AND CANCEL OVER A QUADRILLION IN DERIVATIVES NOW BEFORE WE ARE EATEN ALIVE BY THIS DEBT!!!!!!!
SHUT-DOWN THE PRIVATE FEDERAL RESERVE SYSTEM NOW!!!!! - Reply to this comment
- THE GLOVAL FINANCIAL SYSTEM IS DEAD FOLKS!!!!!!!
STOP BEATING A ''DEAD HORSE''!!!!!!
BRING THE PRIVATE FEDERAL RESERVE SYSTEM INTO RECEIVERSHIP NOW BEFORE IT''S TOO LATE!!!!!
larouchepac.com - Reply to this comment
- The real problem is that every sitting member of the House and Senate who has been in office for the last ten years has totally abdicated his responsibilities to taxpayers. Its clear that Congress has knowingly misled us and assisted in the malfeasance ongoing in the financial sector of America today. Posting just blogs doesn''t seem adequate for the circumstances so I have decided to email every one and let them know I intend to seek their removal from office, through whatever means available. If you would like some interesting info on Citigroup, this mess, and how to email these jerks, check out http://www.peak.org/~LW584
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- How about getting rid of CEO Pandit, since it is his ineptitude that got Citigroup into this mess in the first place. No, we can''t fire guilty people, only scapegoats to whom we pass the blame.
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- Awesome. The government refuses to use our tax dollars to bail them out, so they in turn cut jobs. So...our tax dollars are going to go to support these people when they are out of work AND for big company bailouts. WEEEEE!!!! Economists are SMART!
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- the govt'' needs to take back all of the money they gave them. the average perons is going to struggle for years to come, we might as well make sure they people that cause this lose everything. Take back the money and let the banks fail.
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- I feel very badly for those multitudes being laid off and hope they can secure new jobs in a timely manner. The silver lining though, is that I won''t be getting many more of those THOUSANDS of credit card offers each week from CitiBank. What a relief! Those idiots spend billions on paper, printing, and postage sending out those annoying letters. I will miss the fire-starters though. Oh well...
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- Incog-nito: Detroit with all of its infinite wisdom and so-called smart heads making decisions from various levels, including the design engineers are proof the presumed intelligence can lead to stupidity, such as the failing of their industry. The respective boards are also to blame. This isn''t just a one category blame-game. Plenty of that to go around beyond the so-called industry leaders, including Congress and the buying public.
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- Making it harder to pay is how Citi got in this mess. Their plan is to do the same thing again. MBA''s of the world unite!
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- Pat Robertson on Laura Ingraham today......"Look at all those faces on Mt. Rushmore ....ALL promoters of protectionist, isolationist (if you will) policies of independence and self-sufficiency."
The only voice of reason in the entire GOP. I wish Barack would listen to him.
First time I listened to Ingraham''''s show without changing stations in complete disgust.
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Posted by tawpdawg111
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Teddy Roosevelt was a globalist and expansionist. - Reply to this comment
Mike Huckabee on GOP "rock stars," 2012, health care reform and more.
