ONTD Political

Citigroup Investors Cheer Massive Layoffs, Hope For More

12:37 pm - 12/06/2012

If you're one of the lucky 11,000 employees whose holidays just got ruined by Citigroup, here's some cold comfort: You'll have company soon enough.

Citigroup, once upon a time the biggest bank in the U.S., but shrinking steadily, on Wednesday announced it was laying off 11,000 workers around the world, or about 4 percent of its 260,000-human work force.

Investors cheered the news, pushing Citigroup stock up a whopping 6 percent, which surely made new CEO Michael Corbat happy. On a tropical island somewhere, former Citi CEO Vikram Pandit, recently defenestrated without ceremony, was maybe scratching his head, wondering why he didn't get that kind of love from investors when he slashed jobs. As MarketWatch's David Weidner notes, Pandit was no slouch in that department, cutting 73,000 jobs at the time of the crisis and shedding $250 billion in assets since then.

Still, Corbat has only just begun to cut: Citigroup, the O.G. Too Big To Fail bank, is still way too big. Revenues across the banking sector are down and don't seem in a hurry to get back up, what with the sluggish global economy and regulatory crackdowns and low interest rates and what-not.

Investors weren't driving the stock price higher on Wednesday because they thought the bank's problems could be boiled down to 11,000 people, people who were probably on the lower end of the Citi pay scale anyway. They were cheering the layoffs because they demonstrated a willingness to do even more.

"Net-net: this is a decent start by the CEO," Mike Mayo, a bank analyst at the brokerage firm CLSA, wrote in a research note. "Yet, we view this move as an initial 'tremor' and that an 'earthquake' or more radical restructuring is needed before the April 16th annual meeting."

There's the rub: Citi investors have been suffering for a long, long time, with the bank's stock price essentially flatlined since the crisis. Shareholders fairly quickly lost patience with Pandit's efforts to turn the bank around, taking the unusual step of rejecting his $15 million pay package at the 2012 annual meeting.

Citi may be trimming fat, but it wasn't averse to letting Pandit leave with a big bonus. They were stingier to the people who lost their jobs today, according to Charlie Gasparino at the Fox Business Network. He reports that Citi timed the layoffs to avoid having to pay bonuses at the start of the year. Unfortunately, that's something of a Wall Street tradition.

Gasparino also reports that other banks are planning year-end layoffs. That, too, is not surprising; the too-big-to-fail set still has a lot more downsizing to do.

By Mark Gongloff. Posted: 12/05/2012 5:32 pm EST Updated: 12/06/2012 1:33 pm EST

poetic_pixie_13 6th-Dec-2012 08:33 pm (UTC)
Capitalism is a blight on the earth with investors and bankers like this being the parasitic scum that spreads the infection.

Edited at 2012-12-06 08:33 pm (UTC)
a_phoenixdragon 6th-Dec-2012 08:42 pm (UTC)
This is utterly disgusting!!! Cheering people getting laid off cause it fattens your frigging stocks?! It shows them 'willing to do more'?! FUCK ALL OF THESE PEOPLE.

I always disliked Citigroup/Citibank. Here's yet one more reason to outright hate them. What the everloving fuck...

Merry frigging Christmas you disgusting pigs.

Edited at 2012-12-06 08:42 pm (UTC)
mickeym 6th-Dec-2012 11:14 pm (UTC)
Makes you really hope Karma is paying attention, doesn't it?
a_phoenixdragon 6th-Dec-2012 11:27 pm (UTC)
Karma took a vacay around the last century methinks...
mariam_a 6th-Dec-2012 08:54 pm (UTC)
"Job creators"...
crossfire 6th-Dec-2012 10:51 pm (UTC)
There's a reason why I call them "shittybank."
emofordino 7th-Dec-2012 10:37 am (UTC)
and they are sooooo shitty! they used to own all of my student loan debt, although they sold a chunk of it to discover. I'm really not looking forward to giving them a ton of money for the rest of my life. :/
kitanabychoice 6th-Dec-2012 10:55 pm (UTC)
I seem to have misplaced my surprise! I can't find it anywhere!

On second thought, though, I just have to say I'm glad I stopped banking with Citibank. Although it appears I've just traded the frying pan for the fire, as Capital One has just bought out both my new bank and my credit card company. Meh.

Edited at 2012-12-06 10:57 pm (UTC)
a_phoenixdragon 6th-Dec-2012 11:26 pm (UTC)
OMG. C.O. is just as bad. UGH...
kitanabychoice 6th-Dec-2012 11:51 pm (UTC)
I feel you. When they bought out my credit card company I was like "ah jeez" but when they bought out my bank like two months later, I wanted to crawl in a hole, since finding a non-shitty bank is a nightmare.
a_phoenixdragon 6th-Dec-2012 11:56 pm (UTC)
I have US Bank. They have their own shittiness, but it's way less than saaaayyyy PNC or 5th 3rd (which had their own hand in driving the economy into the ground - building banks while putting people out of their homes). But US Bank isn't everywhere, I realise. Which sucks. Even credit unions have their own problems.

Really starting to contemplate the 'money under the mattress' Depression era ideal. Or coffee cans. Buried in the back yard. *Headdesk*
hinoema 7th-Dec-2012 04:32 am (UTC)
US Bank here, too. Definitely a lesser evil.
veracity 6th-Dec-2012 11:44 pm (UTC)
Be wary of C.O. and identity theft. They sued me for not paying when I made it clear I wouldn't pay until they simply gave me a new account since whoever had access to my previous one kept putting the same charges for three months, and it wasn't me. I hadn't even used the card by that point. I had barely activated and it was Skype and other random charge where they both came up as $20 each month. All I requested was a different account number but all I got was a new card number.
kitanabychoice 6th-Dec-2012 11:50 pm (UTC)
Thanks for the tip! Capital One was my first credit card back when I was 18 and I had negative experiences with them after I got laid off from my first job. They weren't willing to work with me at all to figure something out. They ended up suing me and garnishing my wages at my new job I got six months later for $300. Even though it's been paid off now that lawsuit won't drop off of my credit until 2015. -_-
veracity 7th-Dec-2012 12:02 am (UTC)
I'm not surprised. They're such a shitty company and should be dismantled. I've never seen such a stupid response. If they supposedly have all my stuff taped, they'll know that asking for a new account every month because someone in the company is using my card isn't a hard request to fill. And then they have the most harassing 'pay us now!' people.
the_physicist 7th-Dec-2012 12:01 am (UTC)
my partner has the same problem with a British bank. new card, fraud doesn't go away, because it's the account number that's the problem >_> .
veracity 7th-Dec-2012 12:03 am (UTC)
Exactly. That's why I needed a new account because I needed it to be set up so I could pay it off but NOT be charged every month. And the people who you talk to don't get the simplicity factor, even when "keeping it simple, stupid."
the_physicist 7th-Dec-2012 12:37 am (UTC)
Yeah, I don't get how it's hard concept to understand either. The people defrauding him didn't get much because there was so little in his account, so maybe the bank doesn't care. But he ended up not being able to pay his phone bill because of it, because his account would been overdrawn because they bought some budget air line flights and a cheap pay-as-you-go mobile phone before he realised.
veracity 7th-Dec-2012 01:18 am (UTC)
Apparently it's really difficult to close one account and open another with a completely different set of numbers. Must be the hardest thing ever since no one seems to know how to do it. I paid my card off monthly, so the balance was always zero. Until the theft started.
the_physicist 7th-Dec-2012 01:35 am (UTC)
yeah, i don't get it either. apparently re-sending a new back card every month was easy though. ugh. with my partner is wasn't the credit card, it was the actual bank account...
veracity 7th-Dec-2012 01:38 am (UTC)
And the thing is, they had to send my custom picture card, so they had to do some extra work. Cause they're rather silly. I hated the bank thing. I had that happen previously, too. Such a pain in the ass to get it all straightened out. And the worst part was the fact it happened in Merrill Lynch, so it took forever to get my cash back.
romp 7th-Dec-2012 03:04 am (UTC)
ew! I'm sorry...scary to see the choices being limited like that
maynardsong 7th-Dec-2012 09:39 pm (UTC)
ING your bank? I'm miffed at how low their interest rate has gotten and now that CO bought them..,
kitanabychoice 7th-Dec-2012 09:47 pm (UTC)
Bingo. I just went to check, I can see that the interest rate for my savings went from 0.797% to 0.747% in the course of a month. Meh, I was really liking ING too and was about to get my bf to get an account there too instead of with Bank of America.
the_gabih 9th-Dec-2012 02:06 pm (UTC)
So they're cutting jobs... to create jobs?
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