Interesting Things For you Late @ Night 2: Citigroup may cut 10% of investment-banking staff

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Monday, June 23, 2008

Citigroup may cut 10% of investment-banking staff - MarketWatch

The financial-services giant, which employs about 350,000 workers worldwide, will dismiss thousands this week, adding to the layoffs totaling 9,000 that had been issued as of March 31, reported The Wall Street Journal, citing sources familiar with the matter.

"Citi indicated earlier this year that it would be resizing this business in response to market conditions and as part of our ongoing re-engineering efforts," spokesman Dan Noonan said, without confirming details.

The company has suffered through $15 billion in losses during the past two quarters and will likely write down billions more in the second quarter, the Journal said.

The staff cuts are expected to be sharper among mergers-and-acquisitions bankers, a department that was spared earlier this year. Citigroup's emerging-markets unit and transaction-services arm are among the only departments that may be exempted from staff cuts, although nearly all other major departments within the investment-banking division should see some firings, according to the report.

The staff cuts are the first since John Havens was appointed to head up Citigroup's institutional clients group in late March.

Havens believes that the credit tumult has made some of Citigroup's investment-banking businesses no longer viable, while other units are operating inefficiently and making poor returns, the report said.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
Riley McDermid is a MarketWatch reporter based in New York.