Citi: 50,000 job cuts
November 17, 2008 – 10:19 am
In this investor presentation published on Citi’s investor relations page today, the bank’s “near-term” headcount target is listed at “~300k” (see slide 15). On the next slide, titled “Getting Fit—Fast” the target is listed at “<300k.”
Currently the bank has 352k employees, down from peak employment over 370k. So this presentation is implying another 50,000 job cuts in the “near-term,” with perhaps more to come later.
There are some other interesting slides, especially #18, which shows exposure of the four big banks to U.S. consumer mortgages as a % of total assets.
- Citi, 11% of total assets (with no Option ARMs)
- Chase + WaMu, 13% (of which 14% are Option ARMs…”excluding $85 billion of securitized consumer mortgage loans, of which Option ARMs represent 28%.”
- B of A + Merrill, 17% (of which 4% Option ARMs)
- Wells + Wachovia, 25% (of which 20% Option ARMs)
Citi is calling out Option ARMs as a % of mortgage loans because they don’t have any and it makes them look safe by comparison. That said, it is interesting to note that the bank is highlighting this particularly toxic type of loan, many of which are classified as “prime.” In the Peter Schiff video a couple posts ago, you have Ben Stein talking about the “subprime” problem being small and Peter Schiff saying it isn’t small and isn’t just subprime. The Option ARM implosion is some of the best evidence of that. (Check out the latest issue of Housing Wire Magazine—coming out this month—for my article on one particular Option ARM lender…)
Posted in Wall Street, accounting, banking, credit crunch, stocks |
4 Responses to “Citi: 50,000 job cuts”
Citi will be best served if they lay off all the Indian call center employees first. I’m afraid however, with the bozo’s in charge at Citi, they will layoff American employees and then be baffled when their former employees default on their Citi credit cards and Citi Mortgages.
With Citi’s agressive outsourcing, they have been one of the fastest in the race to the bottom. Now the stupid slobs are accepting American tax payer funds to stay solvent. If these slobs prefer Indian workers over American workers, the Fed should send their sorry behinds to India for bail out funds.
By SteveP on Nov 17, 2008
Actually SteveP, free labor markets create jobs at home, they don’t destroy them. Look at the auto industry. If GM weren’t paying its unionized American workers upwards of $80 per hour, it would be easy for them to compete with Toyota and Honda. Those two manufacture many of their cars in America too. But they do it with non-union labor.
To pay for its excess labor costs, GM has to charge consumers thousands more per car. You can’t make consumers pay more in order to support too-high labor costs. Not unless you subsidize those labor costs with taxpayer dollars.
So why does outsourced labor keep jobs in America? Lower inflation. By keeping labor costs down here at home, products are cheaper. Consumers keep more of their own money to spend on other things, which creates more jobs elsewhere in the economy.
You want to destroy American employment? Watch what happens if we deport 12 million immigrant laborers who’ve been willing to work low wage jobs (bussing tables, delivering food, mowing lawns, etc.). Americans would demand higher pay, driving up costs for end consumers. Getting rid of low cost immigrant/outsourced labor in favor higher cost Americans would actually decrease the number of Americans employed by driving out of business those that rely on immigrant/outsourced labor.
By RolfeWinkler on Nov 17, 2008
Does the presentation of the mortgage portfolio data disregard MBS or a portion of MBS contained in CDOs and SIV but only explain the mortgage loan unsecuritized?
Citi is not the larger mortgage loan originator than WM or WB but the larger holder of the securitized mortgage debt.
By mac_y on Nov 17, 2008