Citigroup announced today that it would lay off 52,000 employees. This is equivalent to 20% of its workforce. Like many other banks, Citigroup has been struggling with losses for the last four consecutive quarters this year. Citigroup stock has also been down 73% since last year.
It is very unfortunate that so many people have to loose their jobs. Even though, they plan to leave the job cuts for the first quarter of next year, it will still affect the lives of many a family. A twenty percent cut in workforce is a rather large number. That is equivalent to one-fifth of its 352,000 workers.
This will certainly hurt our economy significantly. More than likely 52,000 people will be spending less money of Christmas presents this year. Not only are many children going to be disappointed, but so will retailers when their sales do not equate what they expected to earn from the usual Holiday season shopping frenzy.
Despite such large layoffs, Citigroup’s Chief Executive Officer Vikram Pandit, has yet to agree to forego yearly bonuses for already highly paid executives. He says he will wait till next year to for the board of directors to determine executive compensation. How can such a decision with an obvious answer wait till next year? It is quite obvious that executives should not be entitled to bonuses after the company has reduced its workforce by 20%. This in my opinion is not fair. If they are trying to cut fat from their overhead then certainly company bonuses should be trimmed away as well. I would imagine that they will cut or eliminate many bonuses; however, it makes no sense to delay the inevitable.
All the banks who have participated in the TARP, Troubled Asset Relief Program, have agreed not to give bonuses to executives who make more than $250,000. This is in line with the guidelines that were set by Congress on October 3rd of this year.
This has been a very troubled year for the United States. Many companies, especially in the financial sector, have had to make massive layoffs. Lehman Brothers, a well known, respected and established investment bank was forced to file for bankruptcy Chapter 11. Unlike other firms, Lehman Brothers was not offered any assistance from the Federal Governments TARP program. The failure of Lehman Brothers caused the layoff of approximately 26,000 people.
Thousands of additional jobs have been lost in the financial sector as well. Everyone from J.P. Morgan to Royal Bank of Scotland has also made statements that they need to reduce their workforce by 10%.
All these layoffs are certainly not good for the economy. We have been in a recession for a year and it is likely that we will continue this recession well into 2009. No one really knows for sure how long this recession will last. The bottom line is that eventually history has proven that the economy goes in cycles. Just like there are better boom times, there will also be worse recessions. The one thing I do know is that we will eventually get through this and be a stronger country because of it.
It is very unfortunate that so many people have to loose their jobs. Even though, they plan to leave the job cuts for the first quarter of next year, it will still affect the lives of many a family. A twenty percent cut in workforce is a rather large number. That is equivalent to one-fifth of its 352,000 workers.
This will certainly hurt our economy significantly. More than likely 52,000 people will be spending less money of Christmas presents this year. Not only are many children going to be disappointed, but so will retailers when their sales do not equate what they expected to earn from the usual Holiday season shopping frenzy.
Despite such large layoffs, Citigroup’s Chief Executive Officer Vikram Pandit, has yet to agree to forego yearly bonuses for already highly paid executives. He says he will wait till next year to for the board of directors to determine executive compensation. How can such a decision with an obvious answer wait till next year? It is quite obvious that executives should not be entitled to bonuses after the company has reduced its workforce by 20%. This in my opinion is not fair. If they are trying to cut fat from their overhead then certainly company bonuses should be trimmed away as well. I would imagine that they will cut or eliminate many bonuses; however, it makes no sense to delay the inevitable.
All the banks who have participated in the TARP, Troubled Asset Relief Program, have agreed not to give bonuses to executives who make more than $250,000. This is in line with the guidelines that were set by Congress on October 3rd of this year.
This has been a very troubled year for the United States. Many companies, especially in the financial sector, have had to make massive layoffs. Lehman Brothers, a well known, respected and established investment bank was forced to file for bankruptcy Chapter 11. Unlike other firms, Lehman Brothers was not offered any assistance from the Federal Governments TARP program. The failure of Lehman Brothers caused the layoff of approximately 26,000 people.
Thousands of additional jobs have been lost in the financial sector as well. Everyone from J.P. Morgan to Royal Bank of Scotland has also made statements that they need to reduce their workforce by 10%.
All these layoffs are certainly not good for the economy. We have been in a recession for a year and it is likely that we will continue this recession well into 2009. No one really knows for sure how long this recession will last. The bottom line is that eventually history has proven that the economy goes in cycles. Just like there are better boom times, there will also be worse recessions. The one thing I do know is that we will eventually get through this and be a stronger country because of it.
Credit Card / Financial news blog post by Todd Holliday at 7:41 PM 