The San Francisco Chronicle Features Dartmouth Tuck School Of Business Professor Robert Howell On Citigroup Layoffs, 11/18/08
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Bay Area job losses likely in Citigroup layoffs
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http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146A...
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Bay Area job losses likely in Citigroup layoffs Chronicle Staff and News Services Tuesday, November 18, 2008 PRINT
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Financial giant Citigroup Inc. announced plans Monday to cut more than 50,000 jobs - a tidal wave of layoffs that will probably reach the Bay Area, where it is the third-largest retail bank. IMAGES
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Symbol Lookup MORE BUSINESS
Bush considering "orderly" auto bankruptcy 12.18.08
The reductions, which will leave Citi about 20 percent smaller, are the latest step in a stunning remaking of the American banking landscape since the financial meltdown, an upheaval that has included the demise of storied investment houses and the conversion of others into commercial banks.
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Citigroup, which received a $25 billion government investment through the financial rescue package, is widely seen as the sickest Wall Street bank.
3. Supermarket defends itself over Adolf Hitler cake
Challenger, Gray & Christmas Inc., which has tracked downsizing since 1993, said Citi's 53,000 planned job cuts are the second largest on record. IBM announced in July it was cutting 60,000 workers. At its peak in 2007, Citi had 375,000 employees.
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4. 12 things to throw at Bush A shoe? Not bad. But surely we can do better 5. 3 TGI Friday's restaurants close without notice
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About half the cuts are expected to come from selling off parts of the business. The bank has said it will sell Rite Aid 3Q loss nearly triples on store closures 12.18.08 Citi Global Services and its German retail banking businesses, and it plans to unload more, a spokesman said. The other cuts are expected to come from layoffs and attrition. Stocks vacillate amid lingering economic fears 12.18.08
Citigroup occupies about 200,000 square feet of office space at 1 Sansome St. in San Francisco, brokerage firm NAI BT Commercial said in an October report highlighting local companies that may unload space after the contractions and consolidation in the financial services sector. The space accommodates about 1,000 employees, based on industry standards. If the 20 percent cut holds in San Francisco, that would mean 200 lost jobs and could mean additional sublease space coming onto an already weakening office market. It's unclear, however, exactly how many people the company employs around the region, and Citigroup didn't respond to an inquiry from The Chronicle. The company's retail subsidiary, Citibank, operated 88 branches with more than $19.5 billion in deposits across the region, as of June, according to the Federal Deposit Insurance Corp. That makes it the third biggest bank - after Bank of America and Wells Fargo & Co. - in the statistical area defined as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, with 10.8 percent market share. In New York, Vikram Pandit, Citi's chief executive officer, met with employees Monday
12/18/2008 11:54 AM
Bay Area job losses likely in Citigroup layoffs
2 of 3
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146A...
and laid out the bank's strategy in stark terms: "We are a bank. What does a bank do? A bank takes deposits and puts them to work by investing and making loans." That simple, lean plan is a noticeable change from earlier in the decade, when banks were making a huge chunk of their profits from complex structured-finance products based on risky debt, such as subprime mortgages. Now those revenues have all but dried up, and Citi is trying to extract itself from exotic debt instruments. Citigroup, which built up through rapid acquisitions over the past two decades, has long been criticized as too sprawling and difficult to manage. "Why the heck do they need 350,000 people to start with?" said Robert Howell, a finance professor at Dartmouth's Tuck School of Business. "It's always been way overstaffed. They should've woken up to that fact a year ago when they had way too many people to begin with." Former CEO Charles Prince was shown the door last November after Citi suffered big mortgage losses. He was replaced by Pandit, a former Morgan Stanley investment banker well-respected as a banker, but who had never led a public company. Nevertheless, most industry analysts have said Pandit's approach - to sell off assets and cut costs - has been sound. Of the big four U.S. banks, the others are JPMorgan Chase & Co., Bank of America and Wells Fargo & Co., Citi is the only one that has not made a recent major acquisition which analysts say is one of the few chances for growth right now. Citi is also the only big bank left that has posted four straight quarterly losses. Chronicle staff writer James Temple and the Associated Press contributed to this report.
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Most Recommended Comments idocare 11/18/2008 9:17:47 AM I would hope a LOT of these 'losses' are in the 'outsourced' places .. like India and the Philippines. Should be. No? Recommend:
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iamhere 11/18/2008 11:15:36 AM
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"IBM announced in July it was cutting 60,000 workers" This needs to be clarified. It way July 1993 not July 2008. The way it was written make people feel that the IBM job cut was in July 2008. Recommend:
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12/18/2008 11:54 AM
Bay Area job losses likely in Citigroup layoffs
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http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146A...
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12/18/2008 11:54 AM
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http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146A...
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Bay Area job losses likely in Citigroup layoffs Chronicle Staff and News Services Tuesday, November 18, 2008 PRINT
SHARE
COMMENTS (12)
FONT | SIZE:
Financial giant Citigroup Inc. announced plans Monday to cut more than 50,000 jobs - a tidal wave of layoffs that will probably reach the Bay Area, where it is the third-largest retail bank. IMAGES
View Larger Image GET QUOTE
Symbol Lookup MORE BUSINESS
Bush considering "orderly" auto bankruptcy 12.18.08
The reductions, which will leave Citi about 20 percent smaller, are the latest step in a stunning remaking of the American banking landscape since the financial meltdown, an upheaval that has included the demise of storied investment houses and the conversion of others into commercial banks.
1. Top evangelical resigns after backing gay unions 2. Dems' new budget plan adds $9 billion revenue
Citigroup, which received a $25 billion government investment through the financial rescue package, is widely seen as the sickest Wall Street bank.
3. Supermarket defends itself over Adolf Hitler cake
Challenger, Gray & Christmas Inc., which has tracked downsizing since 1993, said Citi's 53,000 planned job cuts are the second largest on record. IBM announced in July it was cutting 60,000 workers. At its peak in 2007, Citi had 375,000 employees.
6. Man cops killed lived in home for mentally ill
4. 12 things to throw at Bush A shoe? Not bad. But surely we can do better 5. 3 TGI Friday's restaurants close without notice
7. Family of inmate who died in jail sues S.F. for $10 million
About half the cuts are expected to come from selling off parts of the business. The bank has said it will sell Rite Aid 3Q loss nearly triples on store closures 12.18.08 Citi Global Services and its German retail banking businesses, and it plans to unload more, a spokesman said. The other cuts are expected to come from layoffs and attrition. Stocks vacillate amid lingering economic fears 12.18.08
Citigroup occupies about 200,000 square feet of office space at 1 Sansome St. in San Francisco, brokerage firm NAI BT Commercial said in an October report highlighting local companies that may unload space after the contractions and consolidation in the financial services sector. The space accommodates about 1,000 employees, based on industry standards. If the 20 percent cut holds in San Francisco, that would mean 200 lost jobs and could mean additional sublease space coming onto an already weakening office market. It's unclear, however, exactly how many people the company employs around the region, and Citigroup didn't respond to an inquiry from The Chronicle. The company's retail subsidiary, Citibank, operated 88 branches with more than $19.5 billion in deposits across the region, as of June, according to the Federal Deposit Insurance Corp. That makes it the third biggest bank - after Bank of America and Wells Fargo & Co. - in the statistical area defined as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, with 10.8 percent market share. In New York, Vikram Pandit, Citi's chief executive officer, met with employees Monday
12/18/2008 11:54 AM
Bay Area job losses likely in Citigroup layoffs
2 of 3
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146A...
and laid out the bank's strategy in stark terms: "We are a bank. What does a bank do? A bank takes deposits and puts them to work by investing and making loans." That simple, lean plan is a noticeable change from earlier in the decade, when banks were making a huge chunk of their profits from complex structured-finance products based on risky debt, such as subprime mortgages. Now those revenues have all but dried up, and Citi is trying to extract itself from exotic debt instruments. Citigroup, which built up through rapid acquisitions over the past two decades, has long been criticized as too sprawling and difficult to manage. "Why the heck do they need 350,000 people to start with?" said Robert Howell, a finance professor at Dartmouth's Tuck School of Business. "It's always been way overstaffed. They should've woken up to that fact a year ago when they had way too many people to begin with." Former CEO Charles Prince was shown the door last November after Citi suffered big mortgage losses. He was replaced by Pandit, a former Morgan Stanley investment banker well-respected as a banker, but who had never led a public company. Nevertheless, most industry analysts have said Pandit's approach - to sell off assets and cut costs - has been sound. Of the big four U.S. banks, the others are JPMorgan Chase & Co., Bank of America and Wells Fargo & Co., Citi is the only one that has not made a recent major acquisition which analysts say is one of the few chances for growth right now. Citi is also the only big bank left that has posted four straight quarterly losses. Chronicle staff writer James Temple and the Associated Press contributed to this report.
From
Mike Harvey Honda ACURA 2005 TL $22,988 ACURA 2001 CL $10,588 FORD 1999 Explorer Sport $6,888 HONDA 2001 Accord $9,800 HONDA 2007 Accord $16,988 HONDA 2007 Accord $18,900 HONDA 2005 Accord $16,988 HONDA 2008 Accord $21,988 HONDA 2008 Civic $17,988 See more from this dealer
About Top Autos View All Top Autos
This article appeared on page D - 1 of the San Francisco Chronicle PRINT
Oakland families get homes for the holidays
SHARE
Santa paid an early visit to East Oakland on Saturday, when nine low-income families received keys...
(12) View Comments »
Share your thoughts on this story. Add Your Comment
State home prices have a brutal 2008 HGTV Dream Home comes to Wine Country High-End Market Still Hopping
You must be signed in to add a comment. Sign In | Register
Search Homes »
Top Ford executive says Dec. sales faring well
Ford Motor Co.'s December sales are faring well, at least through the first two weeks of the month...
Most Recommended Comments idocare 11/18/2008 9:17:47 AM I would hope a LOT of these 'losses' are in the 'outsourced' places .. like India and the Philippines. Should be. No? Recommend:
(35)
(10)
iamhere 11/18/2008 11:15:36 AM
(34)
(1)
Search Cars »
[Report Abuse]
"IBM announced in July it was cutting 60,000 workers" This needs to be clarified. It way July 1993 not July 2008. The way it was written make people feel that the IBM job cut was in July 2008. Recommend:
Pebble Beach Concours -- the real deal Small cars becoming safer in serious crashes Video: Smart car crash test
[Report Abuse]
nyguy 11/19/2008 11:05:18 AM
Park ranger alleges sexual harassment at workplace
A park ranger has sued the California Department of Parks and Recreation for allegedly harassing her for being a lesbian. Jennifer Donovan, who filed the lawsuit in San Diego...
A week before Christmas, layoffs spread State layoff list projects variety of job cuts Pros and cons of employee buyouts
I'd still like to see BofA's headquarters return to San Francisco. Recommend:
View Comments (12)
(9)
(2)
Search Jobs » [Report Abuse]
ADVERTISERS
12/18/2008 11:54 AM
Bay Area job losses likely in Citigroup layoffs
3 of 3
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/17/BURD146A...
Bay Area Is No. 1 S.F. and Oakland win the sports Drama Queen Award. Scott Ostler.
The Helmut Newton Of Smut Violet Blue talks to filmmaking legend Andrew Blake.
NFL Legend Dies Redskins QB Sammy Baugh transformed the league. He was 94.
Ads by Yahoo! Business Brokerage Mergers & acquisitions. Business valuations. Call Gibson & Assocs.
(gibsonassoc.localplacement.com)
Business Janitors Top Cleaning Services for Miami Area Businesses! Contact Us Today. (www.CapitalCleaningContractors.com)
free business checking bank Find free business checking. Your business solution Business.com. (www.business.com)
Subscribe to The Chronicle
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© 2008 Hearst Communications Inc.
12/18/2008 11:54 AM
