Citigroup announced in April that it would eliminate 17,000 jobs. Now it appears there may be up to 45,000 additional job cuts.
The reductions are planned to offset the billions of dollars in subprime lending losses. What does this mean for cardholders?
Actually, cardholders should experience nothing due to these changes. As for the economy, well that is a different story.
The job losses related to the housing market downturn are numbered in the hundreds of thousands. Unless enough jobs can be created in other fields, we can expect rising unemployment in future months.
This is yet another sign that we are likely to experience a recession in 2008. Citigroup is following what several other financial giants have announced in terms of losses and job cuts.
Citigroup did not announce a figure for its latest job cuts. Rather, their spokesperson has simply stated that they are looking to be “more efficient and cost-effective.”
Update: Citi received a $7.5 billion cash investment from the Abu Dhabi Investment Authority. This will be a boost to Citi’s capital base. However, many of the expected layoffs would likely still occur.