Citigroup (C) Whacks Another 50,000 Jobs
Source: http://feeds.feedburner.com/~r/ContrarianProfits/~3/457133768/8659Posted on Tuesday, November 18th, 2008 | In Market Commentary
Citigroup Inc. (C) today (Monday) unveiled plans to cut more than 50,000 jobs in the “near term” and slash expenses by 20% to preserve capital as it faces a global slowdown that’s expected to push well into 2009.
The cuts are on top of the 23,000 jobs eliminated so far this year. Chief Executive Officer Vikram Pandit plans to whittle the company’s workforce down to 300,000. By the time Pandit puts down the machete, he’ll have lopped off about 20% of the company’s headcount since Citigroup’s peak.
Just last week, Citigroup announced the release of 10,000 employees in addition to hiking interest rates an average of 3% for about one-in-five of its credit card holders.
Since the subprime market caved in last year, bank and brokerage firms around the world have shed nearly 160,000 jobs, Bloomberg reported. Citigroup’s plan to let go 50,000 is the largest workforce reduction in the U.S. financial industry since it first started to unravel.
Since the crisis started in June 2007, Citigroup’s shares have dropped like an anchor, falling more than 83%.
Still, that’s not enough to shake Pandit’s confidence that his executions will produce results and redeem the company’s stock. Last week, Pandit and another top manager scooped up about 1 million shares between the two of them. Pandit bought 750,000 shares at prices between $8.92 and $9.45, Dow Jones reported.
In Citigroup’s presentation, the company pointed out that it has the lowest exposure to U.S. consumer mortgage market of the country’s top four banks. Citigroup has $218 billion in U.S. mortgages, Bank of America Corp. (BAC) has $461 billion, Wells Fargo & Co. (WFC) has $340 billion, and JPMorgan Chase & Co. (JPM) has $302 billion.
Other banks are expected continue cutting jobs. The London Times reported over the weekend that JPMorgan is planning to cut thousands. Goldman Sachs Group (GS) is planning to cut 10% of its workforce.
Fidelity Investments, the world’s largest mutual fund manager, plans to shed 1,700 jobs in the first quarter – in addition to the 1,300 it cut last week.
Source: Citigroup Whacks Another 50,000 Jobs; Cuts Expenses by 20%
Last 5 posts by Contrarian Profits
- How and Why China Will Flood the Gold Market - November 25th, 2009
- Gold – getting in while the bull’s still hot - November 25th, 2009
- Gold – Not the end, but possibly a correction - November 24th, 2009
- How do retail sales stack up in an atypical recovery? - November 24th, 2009
- The Best Energy Investments in the World - November 23rd, 2009
Bank, bank of america corp, bloomberg, Citigroup Inc, contrarian profits, Dow Jones, Fidelity Investments, Goldman Sachs Group, Jpmorgan Chase, London Times, Market Commentary, United States, USD, Vikram Pandit, wells fargo
ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.
ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.
Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.
If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.