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50,000 jobs go at City giant
Jim Armitage and Martin Bentham18.11.08
THE world's biggest bank is to axe 50,000 jobs worldwide, it was announced today.
The huge cut in the Citigroup staff comes on top of another 23,000 job cuts already announced by the firm which has been rocked by the global financial crisis. This amounts to one in five of the workforce.
Although no details were provided of the number of posts that will go in London, the decision is certain to involve cuts at the UK headquarters in Canary Wharf.
Chairman Sir Win Bischoff admitted today that the big banks had all hired too many people in recent years. Citi lost more than $20 billion in the past year and on Friday its share price fell to record lows.
The Citigroup cuts are expected in the coming weeks from layoffs and an extension of hiring freezes as the bank attempts to cut its overheads by 20 per cent.
Citigroup's cull comes as other Wall Street giants including JPMorgan and Morgan Stanley launch swingeing cuts while even Goldman Sachs last month announced almost 3,300 of its workers faced the axe.
The news comes as a report by the Local Government Association warned that London will suffer more than the rest of the country in the recession with as many as 370,000 jobs losses.
The study for the LGA says the capital is due to bear the brunt of the recession with as many as one in 12 jobs lost by December 2010.
A further 280,000 posts, or 6.3 per cent, are predicted to be lost in the wider South-East.
"This report obviously demonstrates the gravity of the situation. London clearly is vulnerable," said Bob Neill MP, Conservative spokesman for London.
He called for the Government to focus any extra spending on the capital, given that it pays so much in tax, but also to ensure that the expenditure will not damage the City. "It's very important that London's financial services are not crippled by a future overhang of public debt," he added.
JPMorgan is drawing up plans to cut thousands of jobs across its global operations from the beginning of next year.
Last week a string of banks announced job cuts. Morgan Stanley plans to lose nearly 10 per cent of staff across two of its three divisions and Royal Bank of Scotland is planning to cut about 3,000 jobs in its investment banking division. Goldman Sachs said last month that it was cutting almost 3,300 jobs, or about 10 per cent of its staff.
According to the study for the LGA, almost two in five jobs that could be at risk across the country over the next two years are in London and the South-East.
The number of jobs predicted to go in other regions are 170,000 in Yorkshire & Humberside (6.8 per cent), 230,000 in the North-West (6.7 per cent), 180,000 in the West Midlands (6.6 per cent), 130,000 in the East Midlands (six per cent), 170,000 in the East (six per cent), 70,000 in the North-East (5.7 per cent) and 130,000 in the South-West (5.1 per cent).
Councillor Margaret Eaton, chairman of the LGA, said: "The research shows that the fastest way to get out of recession is for more decisions about the economy to be taken at the local level, which means councils continuing to work with local people and businesses."
The estimates are of net job losses, meaning that more than 1.7 million jobs will cease to exist since some new posts will be created during the period.
Banks are forecast to cut tens of thousands of jobs in London but the construction and manufacturing industries will still be hardest hit by the economic slump, according to the LGA report.
Reader views (13)
Here's a sample of the latest views published.
The truth of it is, a lot of companies, banks and others, will be using the current situation bad as it is, as a smokescreen to shed more jobs than they really need to in order to cut costs and protect profits. In any downturn, training and staffing levels are the first to go, so yes, "Thank you for your professionalism and hard work. The companies biggest asset is it's staff etc etc ... oh, by the way, profits are down and we need to save some money, here's a P45".
To all those people rubbing their grubby mitts in glee at the thought of all these people losing their jobs - I really, really hope that your job is the first to go. It won't be your fault, but hey, tough doo-doo!
- John, London
50000 bankers before xmas, will be 100000 retailers after xmas. who's first for the chop. ?
- Mr S.Port, London
I know people who have worked in the support functions at Citigroup and I can assure you there was a lot of wastage and "free riders" who were not working anywhere near 60 hours, more like 9-5 with a couple of pints at lunch. I also know this applies to other "top" investment banks.
- Anon3, London
I belive it time to get rid some of the hangers on also some the work shy, most of firms have a cull now and again,but it makes no difference to the service the customer receives.
- Edward, medway
I wish someone would realise that 95% of the jobs going in the financial sector are normal jobs! Helpdesk, IT, banking staff..not high flyers!! I work in the financial sector at lower management level and earn no more than I would working in any other sector, The fact is its all going to have a big impact on the capital..which isnt good for anyones business.
- Lisa, london
The bankers earned very much and taking the risk is part of their job. It is to question for the relationship between competition on the free market (which produces winners as well as losers) and financial support of tax payers´ money.
Personally I think they are a bit overdoing it with their financial help.
- Thebavarian, Bavaria/Germany
alison, i hope they will fire you next time so you will avoid these stupid comments and have all the time to help the few remaining estate agents to sell your own house.
- Guido, london
Anon, at the top investment banks you'll find these unfortunate workers were putting in a 60+ hour week and yes, their jobs were necessary. The rest of the team will have to pick up their work - anyone not willing to bite the bullet will be lining up for the axe in the next round in two quarters' time.
- Anon 2, London
You do have to wonder what sort of new jobs they can do having lived in the rarefied atmosphere of 'investment banking'.
Add these investments bankers to the 50,000 estate agents and the market is going to be flooded with long-term unemployed with very little future hope of finding worthwhile employment.
At least the estate agents can spend sometime trying to sell their own house.
- Alison In Turkey, Tagasil, Turkey
I hope it is just me but is Mandy n Brown’s Darling plan to spend our way out of a recession like trying to stop a tsunami with a length of 4be2be4be2be?
- Simon, Cornwall
Its easy to scoff at these 'foolish rich bankers' losing their jobs but in reality these will be staff at all levels and pay scales. Whether its car workers in Longbridge or people who work for a bank, losing your job is not pleasant or good for the overall economy.
For the record I don't work for a bank or a car maker, thankfully.
- Tim, London
These were investment bank jobs: proprietory trading etc, and making money out of US sub-prime mortgages. Also bonds which are now junk, currency trading which lost them millions when the dollar refused to collapse; and all the associated admin and support functions for those business units.
- Neil, london uk, Airstrip ONE .
Am I the only person who wonders what these people in the bank actually did for them in the first place for them to be disposed off like this?
You'd prob not notice any change in the services they provide. People say its the admin or the IT support people who suffer. well letters still have to be sent out, the networks still have to be supported.. so why did these jobs exist? it wasnt to justify their huge profit margins was it????
- Anon, London
