Sunday November 16, 2008

Citigroup to cut 35000 jobs in massive layoff

news.yahoo.com :

Citigroup plans to shed about 10% of its global workforce, a person familiar with the matter said Friday [14 Nov 2008], as the bank tries to return to profitability and faces mounting criticism of CEO Vikram Pandit. The cuts could result in a loss of roughly 35,000 jobs, based on the bank's reported 352,000-person workforce as of 30 Sep 2008. The cuts will be on top of the 23,000 jobs Citigroup has already slashed this year.

This week, the bank's shares fell below $10 for the first time since Sanford "Sandy" Weill in 1998 created Citigroup from the merger of Travelers Group with Citicorp. Citigroup's market value is only about $52 billion, barely twice the $25 billion of capital it received from the US Treasury Department's new bank bailout plan. Citigroup has lost $20.3 billion in the last year, and some analysts believe it may not be profitable in 2009.

- Citigroup shares below $10 is supposed to be a big deal? Not to me. Try below $1. That way, at least you'd probably make something from the buildings. If they're still worth anything. If not, then try 10 cents. But hey, I'm no analyst. Just looking ahead.

Looking at their Sep 2008 balance sheet, we see $39 billion of "goodwill", and another $23 billion of "intangibles", for a total of $62 billion. Did they say their market cap is around $52 billion? Okay, I've changed my mind. Try zero. My target share price for Citigroup is zero. Zero dollars zero cents. Just like for GM. But like I said, I'm no analyst. And yes, your mileage may vary.

As for the workforce, I'm sure you all know what a zero cents target price means. But it's probably considered "too big to fail", so we'll have to see. 23,000 cuts here, 35,000 there. Probably more to come. We'll see.

See also :

1. Citigroup loses almost $10B, writes off $18B, receives $12.5B, slashes dividend and cuts 21,200 jobs
2. Citigroup to cut 20000 jobs and slash dividend : WSJ
3. Wave of job cuts across corporate America, mass layoffs well beyond Wall Street
4. New York may lose 165000 jobs on mass layoffs due to credit crisis
5. United States Postal Service to cut 40000 jobs in first layoff in history

(2008-11-16 18:49:49 SGT) [Biz] Permalink

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