Citigroup to shed thousands of jobs

27 November 2007

Shares in Citigroup have dropped below $30 for the first time in five years as the bank predicts that it may have to cut thousands more jobs in order to save money.

After announcing more massive writedowns in the fourth quarter, North America's largest bank threatens that job cuts may be inevitable, CNBC reports.

"We are engaged in a planning process in anticipation of our new CEO, and our business heads are planning ways in which we can be more efficient and cost-effective to position our businesses in line with economic realities," Citigroup spokesperson Shannon Bell said, adding that specific numbers had definitely not been confirmed.

In the wake of this news, shares in Citigroup fell by 3.15 per cent to $30.70 on the New York Stock Exchange, after dipping to just $29.75 in the afternoon and again dropping below $30 in after hours trading.

Citigroup already cut17,000 jobs before the credit crisis and is still looking for a replacement CEO, after Charles Prince stepped down earlier this month following a $11 billion writedown for the fourth quarter.

This news comes despite Abu Dhabi Investment Authority's $7.5 billion cash injection into Citigroup, which will buy it a 4.9 per cent stake.

Bo Brownstein, Cambiar Investors analyst, told Reuters it was a boost in the outlook for the bank: "Citi is big, it's widely followed, and when people see confidence in it, it should mean something," he said.

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