Tuesday, November 27, 2007

The Ripple Effect Contunues to Grow: Citigroup Plans New Round Of 'Massive' Job Cuts

The negative effects of the housing market melt down and sub-prime mortgage loan bust is continuing to spread. As CNBC is reporting (http://www.cnbc.com/id/21974307), Citigroup may be about to announce a huge layoff of personnel. Some estimates put the number as high as 45,000 employees. Obviously, as more lenders lay off employees, the number of families put in danger of not being able to pay bills and/or at risk losing their homes will grow. Locally, there are MANY Realtors, loan officers, settlement companies and others already in severe financial straits - and Virginia is less hard hit than many states. The outlook is ugly. Here some story highlights:
Citigroup, Wall Street’s largest financial services firms, is planning its second round of large-scale layoffs in less than a year, CNBC has learned. People inside Citigroup say the firm hasn’t set a target number of cuts from its roughly 320,000 employees. But people with knowledge of the matter have described the pending job reductions as "massive" and "large." The total number could reach as high as 45,000, these people estimate.
[I]n recent months, Citigroup has been hit with big losses from its exposure to the decimated mortgage-bond market. After initially announcing a $5 billion write-down because of mortgage-related losses, Citigroup announced that the write-down in profits could be as high as $11 billion. In the meantime, senior officials inside Citigroup are telling people that the firm is preparing for large layoffs. In some cases, the layoffs have already begun, with managers being told by their supervisors that they have to eliminate whole departments.
Obviously, the holiday season is NOT going to be very nice for a lot of people.

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