Sh*tyBank Cut Jobs

[Porker]

Citigroup Inc. C +6.33% set plans to cut 11,000 jobs in the giant bank's first major strategic shift since Michael Corbatsucceeded Vikram Pandit as chief executive in October.

 

The move, announced Wednesday, is the latest illustration of the immense pressure on big banks to take action in response to stagnant revenue and weak stock prices. The decision also shows the company's cost-cutting focus under Chairman Michael O'Neill, a banking veteran who took over for Richard Parsons in April and was known in his past jobs for recommending tough medicine.

 

More than half the cuts will take place in the company's global consumer-banking unit, where Citigroup will close 84 branches around the world, including 44 in the U.S. Citi expects to sell or substantially scale back consumer lending in Pakistan, Paraguay, Romania, Turkey and Uruguay. The company will cut 6,200 jobs in that unit.

 

Citigroup also will cut 1,900 jobs in its securities and banking and transaction-services businesses, with most of those cuts coming in operations and technological-support jobs, and 2,300 jobs in corporate services, real estate and a unit that holds businesses the company is trying to sell or wind down.

 

The New York company said the reductions will save $900 million next year and $1.1 billion annually starting in 2014, while reducing annual revenue by just $300 million or so.

 

Chief Financial Officer John Gerspach, at a Goldman Sachs GS +0.47% financial-services conference, said the cuts are "a fairly comprehensive initial foray" and "part of a continuum" of business reviews and cost cuts by Mr. Corbat's management team.

 

"What you can expect is a continuing examination of every one of our businesses," Mr. Gerspach said. "We will constantly seek new areas to improve efficiency."

 

The decision is the latest sign of banks slimming down amid soft economic growth, uneven markets and tough rules limiting bank profits. Citigroup shares have risen 35% this year but are down 26% since the end of 2010, amid a broad slowdown in markets businesses whose revival after the financial crisis helped bolster major bank stocks. Of the six giant U.S. banking companies, only Wells Fargo WFC +0.73% & Co. shares trade above the company's reported book value, a measure of net worth.

 

Citigroup shares surged 7.1% in Wednesday afternoon trade to $36.71.

 

The cuts stand to make Citigroup, which before the financial crisis had by far the largest workforce among U.S. banks, the smallest of the big four U.S. commercial banks by employment, with around 250,000 workers. J.P. Morgan ChaseJPM +1.55% & Co., Bank of America Corp. BAC +5.66% and Wells Fargo each had at least 259,000 employees at Sept. 30.

 

Citigroup said it would take a $1 billion fourth-quarter charge to cover the costs of the moves.

 

The sweeping cuts are Mr. Corbat's first stamp on the bank as CEO. Mr. Pandit, 55 years old, departed in October following a clash with the board over strategy and performance, according to senior bank executives and advisers. Mr. Corbat, 52, was told a few weeks earlier that a change was possible by Mr. O'Neill.

 

Mr. Pandit's resignation came after a series of missteps this year left some directors feeling that the company wasn't being managed effectively and that the board wasn't kept adequately informed, according to those executives and advisers. Citigroup shares dropped 89% over Mr. Pandit's tenure, and the company was hit this year by a shareholder revolt over executive pay, by the Federal Reserve's rejection of its plan to buy back stock and by a $2.9 billion write-down of a brokerage joint venture withMorgan Stanley MS +2.23% .

 

Mr. O'Neill, 65, became Citigroup chairman in April and immediately began taking a closer interest in operations, in contrast to Mr. Parsons's focus on the job's diplomatic aspects.

 

In a memorandum to staff after his appointment, Mr. Corbat said he would make "changes" after taking time to review the company and its structures.

 

Mr. Corbat had spent a significant part of his recent career at Citi shrinking the bank, particularly its consumer-lending businesses, and dumping derivatives tied to mortgages. Before being elevated to the CEO post, Mr. Corbat ran Citi Holdings, an operating unit the bank formed to house businesses slated for disposal.

 

The news of the layoffs comes as banks and securities firms scramble to tighten their belts to keep pace with shrinking revenue.

 

Salaries, benefits and other compensation at 32 large, publicly traded U.S. financial companies are on track to hit a record $207 billion in 2012, according to an estimate by The Wall Street Journal based on data through Sept. 30.

 

But revenue likely will decline for the second consecutive year, dragged down by the lumbering economy and skittishness among many investors and borrowers. Barring a surprise turnaround, revenue is on pace to total $561 billion, down 7.2% from its 2010 peak.

 

 

 

 

 

 

[Picnic06-Biante15]

You not affected right .....

 

So don't worry.

 

Mine in local banks only, don't trust oversea banks.....

[RadX]

Porker where in Banking, he more into Wanking....that one high dd.... [laugh]

[Porker]

Porker where in Banking, he more into Wanking....that one high dd....

 

CB tonight I don't jerk for you punish you

[Wt_know]

it's ceo lesson 101 la

all newly appointed CEO first thing to do is CUT JOB ... aka cut cost

the easiest thing to do is cut cut cut .... you are FIRED

share price skyrocket ... expect fat bonus one year later ... huat ah!

Edited December 6, 2012 by Wt_know

[Donut]

hey, correct me if i'm wrong in my argument, in the context of banking industry practices.

 

One thing that i'm puzzled about how banks manage manpower is why are they overpaying people, knowing the fact that they will fire the very same people they hired later when the sh1t hits the fan??

 

It's irony, isn't it? what's the benefit of doing it this way?

 

Why can't they pay moderately, keep the costs down and when the sh1t hits the fan, no one gets fired? To me, this is more beneficial for all parties. Why keep hire and fire according to the winds of change? It's a waste of resources and man hours to keep doing it this way.

 

 

[Kezg1]

hey, correct me if i'm wrong in my argument, in the context of banking industry practices.

 

One thing that i'm puzzled about how banks manage manpower is why are they overpaying people, knowing the fact that they will fire the very same people they hired later when the sh1t hits the fan??

 

It's irony, isn't it? what's the benefit of doing it this way?

 

Why can't they pay moderately, keep the costs down and when the sh1t hits the fan, no one gets fired? To me, this is more beneficial for all parties. Why keep hire and fire according to the winds of change? It's a waste of resources and man hours to keep doing it this way.

 

 

 

Its call HIRE and Fire....no emotion/royalty all these while for the angmohs....but sinkie land is catching up too

[Porker]

hey, correct me if i'm wrong in my argument, in the context of banking industry practices.

 

One thing that i'm puzzled about how banks manage manpower is why are they overpaying people, knowing the fact that they will fire the very same people they hired later when the sh1t hits the fan??

 

It's irony, isn't it? what's the benefit of doing it this way?

 

Why can't they pay moderately, keep the costs down and when the sh1t hits the fan, no one gets fired? To me, this is more beneficial for all parties. Why keep hire and fire according to the winds of change? It's a waste of resources and man hours to keep doing it this way.

 

Because they need to justify their own high salaries!

Besides your question: every organization should maintain efficiency. Big organizations tend to have very poor efficiency. There are staff who are under-utilized or not utilized! Sometimes even entire departments exist for no particular reason! So CEO will look at running costs vs benefits (be it tangible aka direct profit generating or intangible aka direct support to profit generation).

Do I make any sense in the shiit I have just blabbered?

[Wt_know]

walao ... so simple you could not understand?

it's not about long term ... it's all about short term gain ... suck the most out of it in the shortest time

in 3-5 years can suck few millions even ten-to-hundred millions for people at the top why not

 

normal middle-to-senior position in other industry ... earns $10K a month ... $10k x 120 months (10 years) = $1.2M

in banking industry $1.2M is like 1 to 3 years can be done liao ... why need to slog 10 years ... will you?

anyone wants to get fired if can earn those income in 1-3 years that other need to work for 10 years

 

hey, correct me if i'm wrong in my argument, in the context of banking industry practices.

 

One thing that i'm puzzled about how banks manage manpower is why are they overpaying people, knowing the fact that they will fire the very same people they hired later when the sh1t hits the fan??

 

It's irony, isn't it? what's the benefit of doing it this way?

 

Why can't they pay moderately, keep the costs down and when the sh1t hits the fan, no one gets fired? To me, this is more beneficial for all parties. Why keep hire and fire according to the winds of change? It's a waste of resources and man hours to keep doing it this way.

Edited December 6, 2012 by Wt_know

[Jamesc]

There are staff who are under-utilized or not utilized! Sometimes even entire departments exist for no particular reason!

You are absolutely right!

 

And in my experience the staff or department that are under-utilized or not utilized

 

are always the last to get chopped.

 

I am trying to do as little work as possible just to keep my job!

 

The hard working productive loyal employees are always the first to go.

 

[Porker]

You are absolutely right!

 

And in my experience the staff or department that are under-utilized or not utilized

 

are always the last to get chopped.

 

I am trying to do as little work as possible just to keep my job!

 

The hard working productive loyal employees are always the first to go.

 

 

Sounds like you work in an investment firm James

[Celicar]

CB tonight I don't jerk for you punish you

Too much info, but quote first.

[Jamesc]

Sounds like you work in an investment firm James

My company actually does a lot of inventments but we only

lose our own money.

 

I think to qualify as an inventment firm we have to lose

other people's money?

 

But you just gave me a great idea, we should expand to

start losing other people's money also!

 

My CEO is just going to love that! He is really into that vision, mission thing

and is always asking us to think big and how we can do things on a grander scale!

 

 

 

 

 

 

 

 

[Yrvsport]

None of our bussiness...so no need to worry lor...

[Rollagt]

Hmm..am wondering if employees working in the securities arm of the bank are more resistant to job cuts compared to the traditional banking side since their expertise are more niche.

[Wyfitms]

Porker where in Banking, he more into Wanking....that one high dd.... [laugh]

 

reminded me of the show Horrible Bosses...

 

retrenched banker was so desperate that he offered to wank the 3 guys for money. And can jizz on his belly button for another 100 bucks hahah

[Altivo]

Hmm..am wondering if employees working in the securities arm of the bank are more resistant to job cuts compared to the traditional banking side since their expertise are more niche.

 

Investment banking is the one that is being hit all ways. Poor economic sentiments, bad public image, law suits from trigger happy NY prosecutors, increased scrutiny from regulators - eg: Dodd Frank Act which is a pain in the arse. Traditional banking/retail banking on the contrary are doing well as investors and consumers pull back their funds for something safe. So is many universal banks, it is the retail banking arm that is propping them up.

[Little_prince]

My company actually does a lot of inventments but we only

lose our own money.

 

I think to qualify as an inventment firm we have to lose

other people's money?

 

But you just gave me a great idea, we should expand to

start losing other people's money also!

 

My CEO is just going to love that! He is really into that vision, mission thing

and is always asking us to think big and how we can do things on a grander scale!

 

 

sounds like temesek.