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Video Roundup: Analysis of Citigroup Plan

Citigroup's decision to cut about 17,000 jobs and impose other cost-cutting measures drew mixed reviews on Wall Street. It is the financial giant's first companywide restructuring since Citicorp and Travelers Group merged in 1998 to form Citigroup.

Citigroup's largest unit, consumer banking, will face the biggest cuts. The company also will eliminate layers of management. These changes are expected to be completed by the year's end.

Despite the job cuts, the company's payroll will not actually shrink, as it plans to expand operations and add jobs overseas in such locations as China and India.

The plan comes amid growing pressure on CEO Charles Prince to revive the company's fortunes, which were once the envy of its big banking rivals.

Prince's New Clothes

One out of three is good in baseball, but in this case two out of the three analysts have little positive to say about Citi's plan or the stewarship of Prince.

That sums up the rountable discussion on "Squawk Box", featuring Craig Woker, Morningstar analyst; Brian Sullivan, Christian & Timbers chairman & CEO; and William Smith, SAM Advisors LLC president, CEO & senior portfolio manager.

Small calls it "textbook Charles Prince -- lots of fireworks." Woker saw it as "smoke and mirrors', adding you "can't shrink yourself to greatness." Sullivan, however, gave Prince credit for trying, saying he "took over a regulatory mess" after succeeding Sanford I. Weill as CEO in 2003 in what has been " a tough row to hoe.

As for Prince's chances for survival, Sullivan says Prince needs to "bold and right" going forward. Smith was more blunt and less kind: "I think he is done."

Time Will Tell

Alan Murray, Wall Street Journal assistant managing editor; Mike Holland, founder of Holland & Company, which owns shares in Citigroup; and "Squawk Box" guest host Lawrence Bossidy discuss the cost-cutting plan soon after its unveiling with Joe Kernen and Becky Quick.

Murray says the cuts 'needed to happen" but adds they are not enouigh. Investors want to see some sign Citi can "get revenues growing," says Murray, and that will determine whether CEO Charles Prince "gets to keep his job."

Holland agrees, saying Prince has done a "little bit to appease his critics" but the key is what will happen over the next year or two in terms of top line growth. Prince has some time but "has to produce clear results."

Bossidy says the situation is more urgent for Prince, who needs "to demonstrate to people that he can get it done in a year."

The Right Moves

Jeffery Harte, an analyst at Sandler O'Neill, was more positive in his assessment, saying the annoucement was "all good news" and that he also liked what was said on the company's subsequent conference call with investors and analysts. In particular, Harte says Citigroup is right to emhasize individual accountability for "each dollar in cost savings."

Harte says "in reality, 5% is the right number" in terms of layoffs and "three years is a reasonable time frame" for the plan to play out.

On the down side, Harte says Citigroup needs to get rid of some real estate, servers and other cost centers because its competitiors have "good efficiency' across their various businesses.

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