Citigroup to slash 10% of its workforce

[DavidS]

Citigroup Plans to Cut 10% of Its Global Workforce: Source - Financials * US * News * Story - CNBC.com

Citigroup plans to shed about 10 percent of its global workforce, a person familiar with the matter said Friday, as it tries to restore profit and quiet mounting criticism of Chief Executive Vikram Pandit.

Citigroup CEO Vikram Pandit plans to make a dramatic statement Monday morning about major cut backs in the struggling firm's workforce aimed at calming market fears that the troubled financial services giant isn't taking the steps necessary to address its many ills, which include a bloated cost structured that has sent shares of its stock reeling, people close to the company said.

These people say that as of Saturday afternoon the exact size of the cuts is not known, but it's expected to be higher than the 23,000 cuts the firm made as of end of the third quarter to its workforce of approximately 350,000 worldwide. These people say the overall size of the cuts that Pandit will announce during a highly anticipated town hall meeting could add up to close to 40,000 depending on the number of asset sales, such as spinning off businesses the firm could pull off in addition to additional planned layoffs.


These people add that during the meeting Pandit will likely cite a specific number of job cuts and say these cuts will occur a relatively short period of time, such as over the next five or six months.

"The object here is for people to take notice," said one person close to the company. "The exact number is still a moving target but it will be dramatic."


Pandit, who has been in the job as CEO of Citi [C 9.52 0.07 (+0.74%) ] for less than a year, has been under fire of late for not moving fast enough to solve the myriad problems facing the big financial services firm. After reporting losses for several quarters because of massive writedowns of bad debt on its books, Citigroup's share price has tanked, falling to a little more than $9 on Friday, from close to $50 in a little over a year.
The bet on depressed mortgage-related debt was not Pandit's doing; it was a legacy of his predecessor, former CEO Chuck Prince who resigned amid the mounting losses in late 2007. But analysts have faulted Pandit for not moving fast enough to addresses Citigroup's other ills — massive cost structure and need to grow its deposit base to compete with stronger competitors such as JP Morgan [JPM 34.47 -2.72 (-7.31%) ] and Wells Fargo [WFC 28.73 -0.36 (-1.24%) ]. For off-hours, real-time Citigroup stock quotes, click here.


Pandit faced stiff criticism recently when he failed to complete a merger with Wachovia, which would have provided Citi with hundreds of billions of dollars in deposits. Just a few days after announcing Citi announced a tentative deal for the big bank, Wells Fargo came in with a superior bid, leaving analysts and shareholders stunned.


In recent weeks, the criticism of Pandit's management of the firm has spread to Citigroup's board. Citigroup says that Pandit has the full support of the firm's board of directors, but CNBC has learned that there is a faction of the board that is now questioning whether he is up for the job of turning around the firm.


A spokesman for Citigroup declined to comment, but people with knowledge of Pandit's thinking say he knows that Monday's speech to employees may be his most important test since taking the job, and may prove the deciding factor in whether he remains in the post.


(For more on Citigroup's troubles—and criticism of CEO Pandit from the bank's board—see the accompanying video.)

Such town hall meetings are usually designed to rally the troops, often during times of turmoil, as Citigroup and Pandit now face. Indeed, Pandit is expected to provide some details on how the firm will prosper in the future and he will ask beaten down employees, who have seen the firm's financial underpinnings shattered over the past two years, buy into his plan for the future.


But these people say Pandit knows he's also speaking to Wall Street—analysts, investors and some disgruntled board members—who aren't happy with his leadership so far. For that reason, Pandit wants to say something dramatic about the size and scope of the upcoming cuts, even if it means further disillusionment among the firm's employees, who have seen their colleagues loose their jobs, and their retirement savings diminished if they were paid in Citigroup stock, as many were.

 

[matty]

Yep, heardabout that.

Here come the dominoes...

 

[Diuretic]

Sack Pandit. Install someone who knows what they're doing.

 

[Annie]

Supposedly Chase is getting ready to lay off thousands.

 

[DavidS]

Supposedly Chase is getting ready to lay off thousands.

Well, they bought Washington Mutual... I would assume they'll need to close off some WAMU branches.

 

[editec]

The vicious cycle we started when we collectively decided we could screw the working class is making the full circle, now.

You cannot screw 50% of the population for fourty years and expect your society not to start to unravel eventually.

 

[DavidS]

Welp, the official numbers are out. Citi is slashing 53,000 jobs. Their stock is taking a hit.

Citigroup to shed another 53,000 jobs: Financial News - Yahoo! Finance