Citigroup to cut ten percent of investment banking jobs!
NEW YORK - June 23, 2008 - Citigroup, Inc., in the latest sign
of bloodletting on Wall Street, is set this week to embark on an aggressive
round of layoffs within its investment-banking division, people familiar with
the matter said.
The New York bank, which has suffered $15 billion in losses over the past two quarters and is likely to rack up billions of dollars in additional write-downs in the second quarter, this week will dismiss thousands of investment-banking employees world-wide as part of a plan to cut the roughly 65,000-employee group by 10%, the people said. Pink slips are likely to be handed out Monday.
"Citi indicated earlier this year that it would be resizing this business in response to market conditions and as part of our ongoing re-engineering efforts," spokesman Dan Noonan said, without confirming specifics.
Across Wall Street, investment banks are adjusting to meager times as they deal with drop-offs in everything from mergers to initial public offerings.
Citigroup, which has more than 350,000 employees around the world, had fired at least 9,000 workers as of March 31. Still, the coming cuts are unusual in their scope and severity. Mergers-and-acquisitions bankers are expected to see especially sharp cuts, in part because their ranks were not trimmed as much as other units earlier this year. But no major department is likely to be spared, aside from some businesses in emerging markets and Citigroup's lucrative transactions-services arm.
Entire trading desks in New York and other cities are expected to be eliminated. And unlike Citigroup's other recent reductions, this round will feature layoffs of dozens of senior managing directors, the people said.
The cuts are the first big move by John Havens, who took the helm of Citigroup's institutional-clients group, which includes the investment bank, in late March. Mr. Havens, a longtime lieutenant of Citigroup Chief Executive Vikram Pandit, has concluded that some of the investment bank's businesses have been rendered obsolete by the credit crunch, while he sees others as operating inefficiently and generating inadequate returns. Mr. Pandit's goal is to reduce the firm's annual expenses by $15 billion.
