Thursday, July 31, 2008

Citi Group - Management of Sub Prime Fallout 2007-08

Citi to Cut 17,000 Jobs in Broad Overhaul
April 11, 2007,

The company announced plans to lay off more than 17,000 workers, with the first pink slips coming this week. About 9,500 jobs will be moved to locations overseas or around the United States where the cost of doing business is lower, from more expensive locations like London, Hong Kong, and New York, where the company’s headquarters are based.

Roughly 8 percent of Citigroup’s 327,000 workers, from entry-level consumer bankers to senior executives in the investment bank, will be affected by the restructuring. All five of its major business divisions will face cuts.

About 1,600 jobs will be eliminated in New York City, where Citigroup currently has about 27,000 employees.

November 26, 2007,

Citi May Start New Round of Layoffs

CNBC reported Monday morning citing unnamed sources, that no exact number was set, though some jobs were already being cut. CNBC’s Charles Gasparino said the layoffs could be between 17,000 and 45,000.

Any cuts would be on top of the 17,000 Citi announced earlier this year, which amounted to about 5 percent of the bank’s workforce.


July 2008

Citygroup may have to write down the value of collateralized debt obligations by $8 billion in Q3 based on Merrill Lynch deal.

Merrill sold its holding for 22 cents on the dollar, while Citi currently values the securities at 53 cents.

Citigroup Deal Ends Its SIV Saga
November 19, 2008,

Citigroup said Wednesday that it would buy about $17.4 billion in assets from structured investment vehicles, or SIVs, that were affiliated with Citi.

Citi was a pioneer in the business of SIVs, which once made lots of money by issuing short-term notes to invest in longer-term securities with higher yields. They traditionally resided off the balance sheets of the banks that created and advised them.

Citigroup to Liquidate Hedge Fund, Report Says
November 19, 2008,

Citigroup is liquidating its Corporate Special Opportunities hedge fund after it lost 53 percent of its value last month, The Financial Times reported.

The C.S.O. fund managed almost $4.2 billion at its peak and has a net asset value of about $58 million and debt of about $880 million, the report said, citing investors.

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