Madlen Read, The Associated Press
November 17, 2008 - 8:25 p.m.
NEW YORK - Citigroup Inc. is shedding approximately 53,000 other employees in the coming quarters as the banking giant struggles to unremitted itself after suffering massive losses from deteriorating debt.
The New York-based bank, which has already reduced its assets by about 20 per cent since the first quarter of the year, also plans to trim expenses by 19 per cent in 2009 from third-quarter levels, to US$50 billion.
The plans, instructed on the company’s Web site, were discussed by CEO Vikram Pandit at the company’s town hall meeting in New York Monday with employees.
The company said it is shrinking its labor force by 20 for cent from its 2007 peak of 375,000. The company had already announced in October that it was eliminating almost 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, excepting has not announced them yet, a prolocutor 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 $2.8 billion during the third proper position.
In an effort to instill confidence in the company, Citigroup emphasized in its presentation Monday that its Tier 1 capital ratio, a measure of fiscal strength, is 10.4 per cent afterward a $25 billion investment from the government - part of the $700 billion financial rescue budget passed by 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., particularly.
Citigroup also stressed that it has doubled reserves in a year to $24 billion; that its revenues are enduring; and that Citigroup has lower exposure to U.S. consumer mortgages than JPMorgan Chase & Co., Bank of America and Wells Fargo.
But the announcements were not met through enthusiasm from investors. Citigroup stock fell 63 cents, or 6.6 per cent, to close at $8.89. The company’s shares have been trading at 13-year lows.
Shortly prior to the town hall meeting in New York, Citigroup chairman Win Bischoff said at a business court of justice 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 be obliged completed - and perhaps injudiciously - we’ve added a lot of commonalty over … this very benign phrase,” Bischoff said.