Citigroup to cut 52,000 jobs

http://ca.news.yahoo.com/s/reuters/081117/business/cbusiness_us_citigroup

NEW YORK (Reuters) - Citigroup Inc revealed plans to cut 52,000 jobs by early next year in Chief Executive Vikram Pandit's most dramatic move yet to restore profitability and bolster a sagging share price.

The cuts, announced Monday, will affect 15 percent of Citigroup's workforce and come on top of 23,000 jobs eliminated between January and September as souring economies and global credit conditions cause the U.S. bank with the farthest reach worldwide to retrench.

The new cuts will leave the second-largest U.S. bank with about 300,000 jobs worldwide, down 20 percent from the end of 2007 and roughly the same number it had at the end of 2005.

Cuts are expected from layoffs, the sale of units and attrition. Citigroup plans to slash expenses 20 percent from peak levels and spend $50 billion to $52 billion in 2009. That compares with $61.9 billion over the last four quarters.

Last week, Citigroup stock fell into the single digits for the first time since Sanford "Sandy" Weill created the bank in 1998 from the merger of Travelers Group Inc and Citicorp.

"If the past is any guide, Wall Street overshoots in terms of hiring and then overshoots when it's time to cut jobs," said Walter Todd, portfolio manager at Greenwood Capital Associates LLC, which invests $1 billion. "But it's not clear if the past is any guide here. It's a moving target, because the markets and the economy are in flux.

Shares of Citigroup, a Dow Jones industrial average component, fell 40 cents, or 4.3 percent, to $9.12 in morning trading on the New York Stock Exchange.

Citigroup's cuts are the deepest by any financial services company since the global credit crisis began last year.

Well over 100,000 jobs have already been lost at the largest banks and brokerages. In the last month, Goldman Sachs Group Inc began cutting 3,200 jobs, while Morgan Stanley said it will cut 10 percent of the jobs in the unit housing its investment banking operations.

Citigroup said it plans to make the latest job cuts in the "near-term." People at the New York bank said it expects to complete the reductions in the first couple of months of 2009.

PANDIT UNDER PRESSURE
Pandit became Citigroup's chief executive last December, and has faced much criticism from investors and others for failing to implement a workable turnaround plan for the bank.

The 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.

Through Friday, shares of Citigroup had 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.

The bank has been trying to downplay reports of dissension among its directors regarding the performance of Pandit and the bank's chairman, Sir Win Bischoff.

Last week, lead director Richard Parsons said the board supported management's plans for the bank.

Scary times, Scary Freakin' Times, I tell ya...

The socialist march is on...

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081123/citibank_rescue_081124/20081124?hub=TopStories

The U.S. government is buying a US$20-billion stake in Citigroup and guaranteeing more than US$300 billion in toxic assets held by the bank.

In exchange for the $20-billion investment, the U.S. Treasury Department will receive preferred stock in Citigroup with an 8 per cent dividend to the Treasury.

The investment cash will come from the $700-billion U.S. bailout package announced earlier this year.

In addition, the deal will provide protection for Citigroup against the possibility of losses on approximately $306 billion in toxic assets held by the bank.

Woohoo! The American Way! Rob from the poor and give to the RICH.

Jugo, from where I'm sitting, this Looks Like robbing from the rich and giving to the richer, both of whom are stealing from the poor :-)

This new story in the future will be known as Robbing Hood.

Canuck wrote:This new story in the future will be known as Robbing Hood.

The porno movie will probably be called "1001 ways to screw the little guy."

Cincy Fan 44 wrote:

Canuck wrote:This new story in the future will be known as Robbing Hood.

The porno movie will probably be called "1001 ways to screw the little guy."

I think you're missing 7 or 8 zero's there.

http://www.sportsline.com/mlb/story/11132847

NEW YORK -- Two New York City Council members say that Citigroup should show its thanks for a federal bailout by sharing the naming rights to the new Mets ballpark in Queens.

The struggling bank is slated to pay $400 million over the next 20 years to name the stadium Citi Field.

The bank made the commitment years ago, when it was flush with cash. Now that Citigroup is getting billions of dollars in federal aid, Staten Island Republicans Vincent Ignizio and James Oddo say the ballpark's name should be changed to Citi/Taxpayer Field.

Citigroup and Mets chief operating officer Jeff Wilpon have been saying that they have no plan to alter the naming-rights deal for the ballpark, which hosts its regular-season opener April 13.

Not a bad idea!

That should be applied to all the companies that were given taxpayers money.

The guy with GW reminded me of Gollum in Lord of The Rings.

http://news.bbc.co.uk/2/hi/business/7745168.stm

Shares in Citigroup have jumped by almost 60% as investors welcomed the US government's rescue plan for the bank.
The US Treasury is set to invest $20bn (£13.4bn) in return for preferred shares in the troubled banking giant.
The Treasury and the Federal Deposit Insurance Corp will also guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books.