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Announcement comes on top of 23,000 in reductions earlier in the year; signifies more pain ahead for banking.
Stephen Taub, CFO.com | US
November 17, 2008
The other shoe dropped at Citigroup, and it was a big one. The banking giant said it is cutting another 52,000 jobs, on top of the roughly 23,000 in reductions made earlier this year.
In a town hall meeting Monday with employees, however, Citi said that its underlying business remains strong and that revenues have been stable.
It noted in a slide presentation on Citi's website that expenses are expected to be down 20 percent from peak levels. The company has a very strong capital position and is currently in a strong competitive position to seize future opportunities, according to documents on the website.
According to CNBC, the new round of job cuts is expected to come from layoffs, the sale of units, and attrition. Investment banking, which has all but dried up, is expected to take an especially big hit, the cable business channel said.
According to the Associated Press, Chairman Sir Win Bischoff said on 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."
Shortly after the announcement, New York Attorney General Andrew Cuomo called for Citigroup executives to forgo their bonuses this year, according to the AP. Calling the extensive job cuts "disturbing," Cuomo said that top executives shouldn't get bonuses while investors, taxpayers, and employees were suffering. He added that other companies should consider doing the same, including American International Group, which has received billions of federal bailout dollars. In October, Cuomo's office asked nine banks to turn over information on bonuses, and he has said that he wants to ensure none of the $125 billion the banks received from the government's Troubled Asset Relief Program will be used on executive pay.
Goldman Sachs Group announced Sunday its top executives won't get bonuses this year.
Citi has lost more than $20 billion in the past four quarters thanks to the blow-up of the global real estate and financial markets.