Monday, 26 November 2007
Citigroup shares fell Monday after CNBC reported the firm could lay off up to 45,000 staffers, leading a broader slide in the financial sector. The expected layoffs are the result of several billion dollars of mortgage losses at Citigroup.
The bank said Monday that it's in a planning process to become more efficient and cost effective as the financial-services giant with billions of dollars in losses from the subprime mortgage-fueled credit crisis.
The process is designed to position Citi's businesses "in line with economic realities" and comes in anticipation of a new Chief Executive at the financial-services giant, spokesman Michael Hanretta said in a statement. CNBC reported early Monday that the bank is planning a large number of layoffs as part of a response to recent huge write-offs for bad mortgage investments.
CNBC described the layoffs as "massive" and said they would not be restricted to the fixed income and mortgage divisions. In April, Citi set layoffs of 17,000 people, or about 5% of its more than 300,000 employees. The CNBC report said division heads at Citigroup had been told to start planning for layoffs, cuts could be as high as 45,000.
More broadly, U.S. financial stocks fell across the board Monday as concerns about the credit markets and big losses from mortgage problems captured investors attention after a long holiday weekend. Shares of E-Trade Financial fell about 9% after The Wall Street Journal reported that possible buyers for the company are concerned the firm has not properly valued its mortgage investments.
Friday a possible bid for the company by a rival like TD Ameritrade was declined. The shares fell 7% and 3.1%, after UBS analysts downgraded the shares to neutral buy, saying credit pressures are eroding the earnings-per-share and dividend outlooks for the company.
Citigroup leads slide on report of huge layoffs
The bank said Monday that it's in a planning process to become more efficient and cost effective as the financial-services giant with billions of dollars in losses from the subprime mortgage-fueled credit crisis.
The process is designed to position Citi's businesses "in line with economic realities" and comes in anticipation of a new Chief Executive at the financial-services giant, spokesman Michael Hanretta said in a statement. CNBC reported early Monday that the bank is planning a large number of layoffs as part of a response to recent huge write-offs for bad mortgage investments.
CNBC described the layoffs as "massive" and said they would not be restricted to the fixed income and mortgage divisions. In April, Citi set layoffs of 17,000 people, or about 5% of its more than 300,000 employees. The CNBC report said division heads at Citigroup had been told to start planning for layoffs, cuts could be as high as 45,000.
More broadly, U.S. financial stocks fell across the board Monday as concerns about the credit markets and big losses from mortgage problems captured investors attention after a long holiday weekend. Shares of E-Trade Financial fell about 9% after The Wall Street Journal reported that possible buyers for the company are concerned the firm has not properly valued its mortgage investments.
Friday a possible bid for the company by a rival like TD Ameritrade was declined. The shares fell 7% and 3.1%, after UBS analysts downgraded the shares to neutral buy, saying credit pressures are eroding the earnings-per-share and dividend outlooks for the company.
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