US banking giant cuts 50,000 jobs

Citigroup to cut workforce by 20 per cent amid fallout from global financial crisis.

    Citigroup has posted losses for the past
    four financial quarters [GALLO/GETTY]

    Wall Street 'darling'

    Citigroup was once the darling of Wall Street as it was perceived to have successfully combined retail with investment banking but was now in big trouble, our corrspondent said.

    The troubled bank is saddled with billions of dollars in losses tied to the subprime mortgage crisis - in which millions of Americans were granted mortgages they were unable to repay - and the current global credit crunch.

    The New York-based bank has posted losses for the past four financial quarters, including a heavy loss of $2.8bn during the third quarter.

    The company said that in addition to job cuts, it plans to lower expenses by about 20 per cent. It has already reduced its assets by more than 20 per cent since the first
    quarter of the year.

    It is also selling its Citi Global Services arm and its German retail banking business.

    Citigroup's shares plunged 6.6 per cent to close at $8.89 on Monday. The company's share price lost about 24 per cent last week, just months after its shares traded at a high of about $50.

    Bonuses questioned

    Win Bischoff, the chairman of Citigroup, said job losses were inevitable given the current financial crisis.

    "What all of us have done - and perhaps injudiciously - we've added a lot of people over ... this very benign period," he told the AP news agency.

    "If there is a reversion to the mean ... those job losses will obviously fall particularly heavily on the financial sector."

    Bischoff also said there was a possibility that some of the company's top executives could opt out of their bonuses this year, saying "watch this space".

    Several top US financial firms have faced heavy criticism for granting their executives millions of dollars in bonuses despite losing billions and shedding jobs.

    Goldman Sachs, the US investment bank, said on Monday that Lloyd Blankfein, its chief executive, and six other company leaders have renounced their 2008 bonuses following the firm's poor performance in 2008 in which it lost 70 per cent of its value.

    SOURCE: Al Jazeera and agencies


    YOU MIGHT ALSO LIKE

    'We scoured for days without sleeping, just clothes on our backs'

    'We scoured for days without sleeping, just clothes on our backs'

    The Philippines’ Typhoon Haiyan was the strongest storm ever to make landfall. Five years on, we revisit this story.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Daughters of al-Shabab

    Daughters of al-Shabab

    What draws Kenyan women to join al-Shabab and what challenges are they facing when they return to their communities?