Citigroup to sack 50,000 employees

What is stored for the employees when retrenchment is the sore reality in corporate India today? Companies are crumpling overnight and downsizing, cost cutting and improving efficiency usually translate to loss of jobs. In the past few months cost cutting and downsizing have been a recurring phenomenon. Industry giants like the Tatas and Birlas have sacked 10,000 and 3,000 employees respectively. If government doesn’t take any corrective actions then today’s situation might take an ugly turn, warned by corporate India’s leaders in India Economic summit on Sunday.

After the Tatas and Birlas who is the next?

In the coming quarters banking giant Citigroup Inc. is cutting approximately 50,000 more jobs. It’s supposed to be the recouping strategy to steady itself after suffering losses from deteriorating debt. The plan is already posted on company’s website and discussion with CEO Vikram Pandit is underway at the town hall meeting in New York.

The company had already announced in October that total headcount will be reduced by 20 percent from the total strength of 375,000 calculated at the end of 2007. As a proactive measure company has already eliminated about 22,000 jobs from those levels. The total workforce reductions include other thousands of jobs that are set to be axed when Citigroup complete the sale of German retail banking business and Citi Global Services.

Citigroup has incurred four straight quarterly losses including a massive loss of $2.8 billion during the third quarter. In addition to job cuts, company plans to reduce expenses by 20 percent approximately. Citi shares are falling down continuously and trading at 13-year lows. It would be irresponsible for Citi and other companies not to concentrate at staffing in the event of long running economic meltdown, said Citigroup Chairman Win Bischoff at a business forum in Dubai, United Arab Emirates.

Bischoff added, “We have carelessly added extra number of people during this benign period. The job losses will fall particularly on the financial sector in London and New York.

However, a Citigroup spokesman said that while concentrating on job cuts in certain regions, this would generally be across the entire company around the world.

Citigroup’s plan to sack employees includes top leaders would go without bonuses this year. A move that would effectively amount to a substantial pay cut for the company’s executives.

What will happen to the lost bonuses? Bischoff said, “Watch this space”.