bonnie Posted December 5, 2012 Share Posted December 5, 2012 Citigroup to Cut 11,000 Jobs, Take $1 Billion Charge By Donal Griffin - Dec 5, 2012 9:03 AM CT Citigroup Inc. © Chief Executive Officer Michael Corbat, who took over the bank in October, is cutting more than 11,000 jobs, scaling back operations in some emerging markets and taking a $1 billion charge this quarter in an effort to drive down costs. The institutional clients group, which includes trading, investment banking and transaction services, will cut about 1,900 jobs, New York-based Citigroup said today in a statement. That move seeks to “improve overall productivity in our markets business, especially in areas experiencing continued low profitability, such as cash equities,” the bank said. The stock jumped more than 4 percent in New York trading. Citigroup Inc., the third-biggest U.S. bank, said it will take a pretax charge of about $1 billion this quarter as part of a plan to eliminate more than 11,000 jobs. Photographer: Peter Foley/Bloomberg Citigroup Job Cuts Not Surprising, Cohan Says 2:07 Dec. 5 (Bloomberg) -- William Cohan, author of "Money and Power: How Goldman Sachs Came to Rule the World" and a Bloomberg View columnist, talks about Citigroup Inc.'s announcement today that it will take a pretax charge of about $1 billion this quarter as part of a plan to eliminate more than 11,000 jobs. Cohan speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Cohan is a Bloomberg View columnist. Dec. 5 (Bloomberg) -- Citigroup said it will take a pretax charge of about $1 billion this quarter as part of a plan to eliminate more than 11,000 jobs. RBC Capital Markets Director of Equity Research Gerard Cassidy speaks on Bloomberg Television's "In The Loop." (Source: Bloomberg) Citigroup Job Cuts `Start of a Trend,' Cassidy Says 1:36 Dec. 5 (Bloomberg) -- Gerard Cassidy, an analyst at RBC Capital Markets, talks about Citigroup Inc.'s plan to eliminate more than 11,000 jobs, scale back operations in some emerging markets and take a $1 billion charge this quarter. Cassidy speaks with Betty Liu and Julie Hyman on Bloomberg Television's "In the Loop." (Source: Bloomberg) Citi CEO Corbat Puts Stamp on Firm With Job Cuts 1:42 Dec. 5 (Bloomberg) -- Bloomberg's Erik Schatzker discusses the decision by Citigroup CEO Michael Corbat to cut 11,000 jobs and take a $1 billion charge in the fourth-quarter. He speaks on Bloomberg television's "In The Loop." Enlarge image Citigroup to Take $1 Billion Charge, Eliminate About 11,000 Jobs The Citibank building in New York. Photographer: Timothy A. Clary/AFP via Getty Images Corbat, 52, is adding to a January cost-cutting announcement by predecessor Vikram Pandit, who had previously sought to boost some of the businesses targeted today. The new CEO is responding to an industrywide slump in trading and investment banking, stiffer capital requirements and Europe’s debt crisis. Goldman Sachs Group Inc., Morgan Stanley and UBS AG are among rivals focused on reducing costs. Global Banking Under Siege as Nations Guard Interests “These actions are logical next steps in Citi’s transformation,” Corbat said in the statement. “While we are committed to -- and our strategy continues to leverage -- our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns.” Savings Projection Citigroup advanced $1.42, or 4.1 percent, to $35.71 at 10 a.m. in New York. Management is “rationalizing the business in an intelligent way,” Appaloosa Management LP’s David Tepper said. Citigroup was Appaloosa’s third-biggest holding by market value as of Sept. 30, according to data compiled by Bloomberg. The latest eliminations amount to about 4.2 percent of Citigroup’s workforce of 262,000 people at the end of September. The largest share of reductions, about 6,200 jobs, will come from the global consumer-banking business, Citigroup said. The lender expects to sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay. An additional 2,600 jobs will be cut in the operations and technology group and global functions. Citi Holdings, the unit disposing of unwanted assets, will eliminate about 350 positions. The plan will save about $900 million in 2013, and projected annual savings will exceed $1.1 billion beginning in 2014, the company said. Annual revenue will drop about $300 million, according to the forecast. The $1 billion charge this quarter is before taxes. An additional $100 million of related charges will come in the first half of next year. Shrinking Bonuses The bank had invested $3.9 billion last year in all of its businesses, including initiatives to meet regulatory requirements, modernize branches and boost spending on consumer marketing, Pandit said during a Jan. 17 conference call with analysts and investors. “We also upgraded talent in both our institutional and consumer businesses,” Pandit, 55, said then. The securities unit, which includes trading and investment banking, accounted for “a little less than $1 billion” of the investments, Chief Financial Officer John Gerspach later said. Citigroup also plans to shrink that division’s bonuses for this year by as much as 10 percent, two people with direct knowledge of the decisions said last week. Cost-cutting by investment banks needs to be severe to deal with the impact of the new capital rules, Sanford C. Bernstein analysts said last month. Firms must slash pay and headcount and get rid of almost a third of their trading-business assets to earn even half the returns they once made, while replacing some traders with computers, the analysts wrote. To contact the reporter on this story: Donal Griffin in New York at dgriffin10@bloomberg.net To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net Quote Everything you do is based on the choices you make. It's not your parents, your past relationships, your job, the economy, the weather, an argument, or your age that is to blame. You and only you are responsible for every decision and choice you make, period ... ... Wish more people would realize this. Quotes by Susan Gottesman Link to comment Share on other sites More sharing options...
bonnie Posted December 5, 2012 Author Share Posted December 5, 2012 BONNIE thank you for posting this article--- when the 3rd largest bank is in trouble and laying off people we know that country is in trouble dgrimm60 It probably is because they are racist skinhead KKK's and are doing this to spite Obama. Then again,maybe they don't know that spending more and more is the way to balance their "checking account" People seem to think it works well for Obama Quote Everything you do is based on the choices you make. It's not your parents, your past relationships, your job, the economy, the weather, an argument, or your age that is to blame. You and only you are responsible for every decision and choice you make, period ... ... Wish more people would realize this. Quotes by Susan Gottesman Link to comment Share on other sites More sharing options...
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