Citigroup Inc is shedding approximately 53,000 more employees in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.
The New York-based bank, which has already reduced its assets by about 20 percent since the first quarter of the year, also plans to trim expenses by 19 percent next year from third-quarter levels, to US$50 billion.
The plans, posted on the company’s Web site, were discussed by CEO Vikram Pandit at the company’s town hall meeting with employees in New York on Monday.
The company said it was shrinking its work force by 20 percent from last year’s peak of 375,000. The company had already announced last month that it was eliminating about 22,000 jobs from that level.
About half of the expected work force reductions will come from business sales; Citigroup already announced that it was selling Citi Global Services and its German retail banking business, accounting for about 18,000 jobs. Citi is planning to sell other businesses, too, but has not announced them yet, a spokesman said.
The other half of the work force reductions will come from layoffs and attrition, the spokesman said.
The New York-based bank has posted four straight quarterly losses, including a loss of US$2.8 billion during the third quarter.
In an effort to instill confidence in the company, Citigroup emphasized in its presentation on Monday that its Tier 1 capital ratio, a measure of financial strength, is 10.4 percent after a US$25 billion investment from the government — part of the US$700 billion financial rescue package passed by the US Congress last month.
That ratio is higher than peers Bank of America Corp and Wells Fargo & Co, after their purchases of Merrill Lynch and Wachovia Corp.
Citigroup said that it had doubled reserves in a year to US$24 billion and that its revenues were stable.
The bank also said that it had lower exposure to US consumer mortgages than JPMorgan Chase & Co, Bank of America and Wells Fargo.
But the announcements were not met with enthusiasm from investors. Citigroup stock fell US$0.63, or 6.6 percent, to close at US$$8.89. 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,” Bischoff said. “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.
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 that seven top executives, including chief executive Lloyd Blankfein, opted out of receiving cash or stock bonuses for this year amid the ongoing credit crisis.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
UNWAVERING: Paraguay remains steadfast in its support of Taiwan, but is facing growing pressure at home and abroad to switch recognition to Beijing, Pena said Paraguayan President Santiago Pena has pledged to continue enhancing cooperation with Taiwan, as he and Japanese Prime Minister Fumio Kishida expressed opposition to any unilateral change to the “status quo” in the Taiwan Strait using force, Japanese media reported on Saturday. Kishida yesterday completed a trip to France, Brazil and Paraguay, his first visit to South America since taking office in 2021. After the Japanese leader and Pena spoke for more than an hour on Friday, exchanging views on the situation in East Asia in the face of China’s increasing military pressure on Taiwan, they affirmed that “unilateral attempts to change the