CNBC's Gasparino: Citigroup Job Cuts May Reach 45,000
Citigroup Chief Executive Charles Prince could slash as many as 45,000 jobs over three years, according to CNBC's Charlie Gasparino.
The bank, which is under pressure to cut costs, is expected to announce job cuts on Wednesday.
It's unclear if the majority of these cuts will come through attrition or layoffs, Gasparino said. Already, pink slips are starting to be handed out to Citigroup executives in the fixed-income department, he said.
Many Citigroup executive are opting to leave voluntarily and take a severance plan that one source told Gasparino gives them one week's pay for each year at the firm up to 25 years.
Still many analysts are skeptical of the restructuring and Prince's ability to sell it to major investors, Gasparino said.
That's because Prince is also planning to expand the firm with the expected $600 million purchase of a hedge fund, Old Lane Capital. The fund has a brief track record but has some seasoned executives to help build Citigroup's management team, including former Morgan Stanley stars Vikram Pandit and John Havens, Gasparino said.
“Citigroup is in a growth mode,” Richard Bove, a financial strategist at Punk, Ziegel, told CNBC’s “Morning Call.” “It’s moving very rapidly. This eyewash about cost-cutting is being thrown up to keep investors happy. Prince is in total control at Citigroup.”
He said the company has the “biggest growth spurt in its history ahead of it” because it plans to expand overseas.
“(Prince) has made significant changes in Citigroup,” Bove said. “He’s divested businesses which (former CEO) Sandy Weill bought, he’s changed the structure of the management team, he’s reallocated where assets are going, he’s moving this company forward in exactly the right fashion. He’s now starting to invest heavily in technology and expansion of the worldwide system. This guy (Prince) is going to survive and this is one of the best stocks you can put your money in.”