big 1st Q losses for Citi

according to FT April 17th issue

Citi’s $5.1bn loss highlights depth of crisis

Citigroup underlined the plight of financial firms squeezed by the credit crunch and the slowing US economy by announcing a $5.1bn quarterly loss, nearly $16bn in writedowns and 9,000 job cuts

Citigroup’s Pandit vows major cost cuts
By Francesco Guerrera and Ben White in New York

Vikram Pandit, Citigroup’s chief executive, has vowed to slash the beleaguered financial group’s cost base by up to 20 per cent, deepening fears that Wall Street and the City of London are about to be hit by tens of thousands of additional job losses.
Mr Pandit, who took over Citi in December, indicated cuts in operating exenses would not only come from reductions in the 370,000-strong workforce, but also from improvements in computer systems and a greater focus on core businesses.

However, his cost-reduction targets suggest Citi, which is likely to report a large first-quarter loss on Friday, could cut more jobs than expected. Analysts predict the company will shed around 25,000 jobs in the next few months after two years of rapid expense growth, which left it with $61.5bn in operating expenses in 2007.
”It is clearly feasible for us to take 10, 15, 20 per cent off our cost base, especially in information technology and operations,” Mr Pandit said.

Tuesday, April 29 at 5:30 at Metrazur in Grand Central

Dear fellow Alums,

I don't know about you, but after the last six months that Citi has had I could use a drink!

Please join me
on Tuesday, April 29 at 5:30 at Metrazur in Grand Central.
It is on the mezzanine and we will be in the bar area, against the wall.

Please let me know if you are planning to come so I can have an idea of how many seats to hold--
and to keep an eye out for you.

Best,

Libby
Dubick & Associates
115 East 87th Street
NY, NY 10128
212-828-3873
www.dubickconsulting.com

John Reed says the merger that created Citigroup was a 'mistake'

sent by M. BLUMSTEIN
out of Financial Times April 04, 2008


[Citialum] http://www.ft.com/cms/s/0/0b68d0c8-01e0-11dd-a323-000077b07658.html?nclick_check=1

John Reed says the merger that created Citigroup was a 'mistake'
By Francesco Guerrera in New York
Published: April 4 2008 03:00 Last updated: April 4 2008 03:00

The landmark merger that created Citigroup was a "mistake" that failed to benefit the financial services conglomerate's investors, customers and employees, says John Reed, who masterminded the $166bn deal with Sandy Weill in 1998.

Mr Reed's comments come days before Sunday's 10th anniversary of the merger announcement and underline the challenges faced by Vikram Pandit, who took over as Citigroup chief executive in December.

At the time of its creation, Citigroup - which combined Citicorp, Mr Reed's bank, with Mr Weill's Travelers insurance and brokerage business - was hailed as ushering in a new era by creating a one-stop shop for consumer and corporate customers. Mr Reed said it was unclear whether the company's model or its management deserved the greater share of blame for its problems. But he said Citigroup had turned out to be a "sad story".

"The specific merger transaction clearly has to be seen to have been a mistake," Mr Reed said. "The stockholders have not benefited, the employees certainly have not benefited and I don't think the customers have benefited because our franchises are weaker than they have been."
Citi's shares have lost more than half their value in the past year and it has been forced to raise $30bn to bolster its balance sheet in the wake of the subprime crisis. Once-smaller rivals such as Bank of America and JPMorgan Chase are worth more.

Mr Reed, who left Citigroup in 2000 after losing a boardroom clash with Mr Weill, has been speaking with Mr Pandit since he replaced Chuck Prince as chief executive, people close to Citi say. They say Mr Reed has advised Mr Pandit to consider spinning off businesses, such as Citi's international consumer arm. Mr Reed declined comment, but said Mr Pandit would have to rebuild Citi's culture.

"Citi's troubles today are a culmination of a set of problems. There has been a general weakening of the management fabric," he said. "If the body loses its immune system, you are going to die of something.
The core of what was happening was a lack of supervision and structure at the managerial level."

Mr Weill was unavailable for comment.
Don Callahan, Citi's chief administrative officer, defended the merger, saying it had "revolutionised" finance.
Additional reporting by Ben White in New York

The Short View, Page 13 Mistaken behemoth, Page 14
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