TEXT OF STORY
SCOTT JAGOW: There was a big meeting this morning at Citigroup — town hall style. The bank’s CEO delivered some bad news: Citigroup will eliminate tens of thousands of jobs, and that might not be enough to get the bank back in the black.
Marketplace’s Janet Babin reports from North Carolina Public Radio.
JANET BABIN: Citigroup CEO Vikram Pandit told employees that about 50,000 jobs would be lost. As of September, the company had about 350,000 employees worldwide.
The bank also hopes to reduce expenditures by 16-19 percent next year. Citigroup has been stunned by risky assets and bad loans. Last year the company lost $20 billion.
Christopher Whalen at Institutional Risk Analytics said Citigroup’s troubles predate the financial crisis.
CHRISTOPHER WHALEN: They have always had a higher expense profile than their larger peers. And they’ve always had higher loss rates. In other words, the write-offs that they have to take on their credit-card and consumer-loan portfolios have typically been higher than their peers.
Whalen said the job cuts announced today will help, but the company won’t recover until the second half of next year.
I’m Janet Babin for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.