Citigroup gets bailout, US to take $20 bn stake

November 24, 2008

The government unveiled a bold plan to rescue troubled Citigroup, including taking a $20 billion stake in the firm as well as guaranteeing hundreds of billions of dollars in risky assets.

The action, announced jointly by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp., is aimed at shoring up a huge financial institution whose collapse would wreak havoc on the already crippled financial system and the U.S. economy.

“With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy,” the three agencies said in a statement issued Sunday night. “We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks,” they said.

The $20 billion cash injection by the Treasury Department will come from the $700 billion financial bailout package. The capital infusion follows an earlier one — of $25 billion — in Citigroup in which the government received an ownership stake.

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Citigroup: ‘Job-cut impact on India to be minimal’

November 19, 2008

Citigroup on Tuesday ruled out any major retrenchment in its India operations. Elucidating the move to cut 52,000 jobs across the globe, Sanjay Nayar, Citi’s South Asia CEO, said the job-cut impact on India would be minimal.

Nayar explained that the bank has already reduced its staff strength in the country through sale of its BPO arm, Citigroup Global Services (CGSL), to TCS about a month ago, and there was little need to go for further reduction in manpower.

Speaking at the BS Banking Round Table conference on Tuesday, Nayar said, “There is a big difference in what is happening in the US and Europe, and in India. There is growth in Indian market. After five years of substantial growth, there could be some flab.”

He said that Citi’s businesses in some of the emerging markets, including India, were doing very well. Spurred by demand for credit and need for financial inclusion, the bank continued to expand its operations in the country, he said. “India will not be affected by the job-cut decision announced yesterday. There could be some cuts in Citi’s domestic workforce on the back of under-performance,” Nayar added.

Source: Business Standard

Citi to slash over 52,000 jobs; targets to cut cost by 20%

November 18, 2008

citi-bank-logoVikram Pandit-led financial services giant Citigroup on Monday said it will cut more than 52,000 jobs in the coming months and reduce expenses by 20 per cent in 2009.
Citi on Monday said it intends to reduce the total head count to less than 3,00,000 in the near term as part of the plan.

The financial services behemoth had a workforce of 3,52,000 in the third quarter of 2008. “The head count is expected to be down 20 per cent in the near term from peak levels,” the company said on Monday.

Aiming to have less than 3,00,000 people, Citi would have to cut over 52,000 jobs.
The plans to be discussed in the meeting with Citi staff in New York on Monday are posted as a power point presentation on the company’s website.

The firm, which has been severely battered by the financial crisis, has incurred huge losses in recent quarters. In the third quarter, Citi had a loss of $2.8 billion. In terms of expenses, the financial services major aims to save $50 billion to $52 billion in 2009.

“Expenses are expected to be down 20 per cent from peak levels,” the firm led by India-born Pandit said.

Source: NDTV