Citi Layoffs - Incoming Junior Bankers Not Safe

"Entire trading desks in New

by spiral9 (Monkey, 52 Points) on 6/22/08 at 7:58pm

"Entire trading desks in New York are expected to be eliminated"...yikes

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They can screw anyone they

by Vol Inversion (Senior Chimp, 27 Points) on 6/22/08 at 8:59pm

They can screw anyone they want to, especially poor analysts who have worked their asses off

Citi to Slash Investment Banking Jobs World-Wide
By DAVID ENRICH and DENNIS K. BERMAN
June 23, 2008

Citigroup Inc., in the latest sign of bloodletting on Wall Street, is set this week to embark on an aggressive round of layoffs within its investment-banking division, people familiar with the matter said.

The New York bank, which has suffered $15 billion in losses over the past two quarters and is likely to rack up billions of dollars in additional write-downs in the second quarter, this week will dismiss thousands of investment-banking employees world-wide as part of a plan to cut the roughly 65,000-employee group by 10%, the people said. Pink slips are likely to be handed out Monday.

"Citi indicated earlier this year that it would be resizing this business in response to market conditions and as part of our ongoing re-engineering efforts," spokesman Dan Noonan said, without confirming specifics.

Across Wall Street, investment banks are adjusting to meager times as they deal with drop-offs in everything from mergers to initial public offerings.

Citigroup, which has more than 350,000 employees around the world, had fired at least 9,000 workers as of March 31. Still, the coming cuts are unusual in their scope and severity. Mergers-and-acquisitions bankers are expected to see especially sharp cuts, in part because their ranks were not trimmed as much as other units earlier this year. But no major department is likely to be spared, aside from some businesses in emerging markets and Citigroup's lucrative transactions-services arm.

Entire trading desks in New York and other cities are expected to be eliminated. And unlike Citigroup's other recent reductions, this round will feature layoffs of dozens of senior managing directors, the people said.

The cuts are the first big move by John Havens, who took the helm of Citigroup's institutional-clients group, which includes the investment bank, in late March. Mr. Havens, a longtime lieutenant of Citigroup Chief Executive Vikram Pandit, has concluded that some of the investment bank's businesses have been rendered obsolete by the credit crunch, while he sees others as operating inefficiently and generating inadequate returns. Mr. Pandit's goal is to reduce the firm's annual expenses by $15 billion.

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L wrote: anyone have inside

by GenghisKhan (Orangutan, 330 Points) on 6/22/08 at 10:08pm

Yes, I usually do. Unfortunately, you're not going to like it.

This reduction in force has been a long time in coming. Prior RIFs were scaled back first because Vikram wanted to put his stamp on things, then because Havens had to do the same. What I understand is that this turn was originally directed towards moderately senior bankers, but has been expanded to try to get most of the pain behind everybody before paralysis sets in.

Want the real bad news from (most) of your perspectives? Citi is going to be pulling offers on incoming junior bankers shortly. You heard it here first.

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I'm fairly certain there is

by Devils Advocate (Senior Gorilla, 782 Points) on 6/22/08 at 10:30pm

I'm fairly certain there is no bank that has not laid off

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Will banks even recruit in

by EnteringRealLife (Senior Baboon, 206 Points) on 6/22/08 at 10:41pm

Will banks even recruit in spring 2009? Everything seems to be getting worse and worse.

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Actually, if you think about

by nebanker (Baboon, 142 Points) on 6/22/08 at 10:54pm

Actually, if you think about it, this isn't anything new, really. Back when Pandit took over he announced that they'd be laying off 10-15 percent. They laid off about 5 percent of the IB a few months ago, and here is the remaining 10 percent. The question now is, is this it for Citi or is there more to come?

BTW, this is a horrible way to manage a business, having staggered layoffs. If management has any sense at all they will send out an email saying, "OK, we've made all the cuts we will be making and you can relax now". But Citi and all the banks are in such crappy condition that I doubt they can make this guarantee to their employees...

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Genghis can you provide any

by zee7 (Chimp, 3 Points) on 6/22/08 at 11:30pm

Genghis can you provide any more info regarding the incoming analyst layoffs? Maybe over PM if necessary? I am heading to Citi and am actually moving soon to nyc, so i'm obviously very worried after reading this news

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It's a brutal time. All I

by ideating (King Kong, 1584 Points) on 6/22/08 at 11:43pm

It's a brutal time. All I can say is don't close any doors. A lot of people will say that it doesn't matter if you get laid off, over the matter of a career it won't matter, blah blah- I won't bullshit you, getting laid off drastically alters your plan (at least a few years) but that's the way it is. Very few people actually end up with the optimal career path that they envision.

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Additional question

by zee7 (Chimp, 3 Points) on 6/22/08 at 11:50pm

Appreciate the added input Genghis. One thing I was wondering, is HR alerted to these types of cuts beforehand? The fact that they have been emailing out to the incoming analysts quite a bit recently would add to the sting of a layoff.

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Genghis, do you think this will affect Private Equity?

by curiousmonkey (Senior Baboon, 232 Points) on 6/23/08 at 12:00am

I am starting in a few weeks and I am the only analyst joining a MM PE firm. How bad is the situation for PE firms? Do you think they'll be cutting their (admittedly small) workforces?

We've been doing deals, but not nearly as many as last year or the year before. There's portfolio company work, but even that's not much to occupy everyone.

If PE lays people off, I am guessing they'll more likely be at the senior level? Analyst/associate salaries are a rounding error for the firms. I am guessing Blackstone, KKR, Carlyle will go first with layoffs and pulling offers from hired pre-MBA bankers/consultants...

My condolences to anyone affected by these layoffs. Everyone's going to tell you that it's not the end of the world and that you'll spring back, which is true. But **** like this is real tough and can really screw up social lives and emotional well-being.

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not that i have heard. i

by officer farva (Monkey, 47 Points) on 6/23/08 at 3:34am

not that i have heard. i think word o nthe street is actually macquarie was still actively hiring junior bankers and evercore was looking to add a few senior partners hopefully on the cheap

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great photo

by joefish (Gorilla, 575 Points) on 6/23/08 at 4:34am

great photo

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And it doesn't

by HerSerendipity (Gorilla, 708 Points) on 6/23/08 at 8:08am

And it doesn't stop.

http://dealbook.blogs.nytimes.com/2008/06/23/goldman-said-to-prepare-sco...

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Not good news at all. How is

by indian-banker (Senior Gorilla, 809 Points) on 6/23/08 at 10:45am

Not good news at all. How is this affecting Asia? As far as I know, Asia hasn't seen any layoffs.

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HR

by MMmonkey (Senior Orangutan, 389 Points) on 6/23/08 at 11:37am

That's their job.

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this is what happens when,

by MarginCalling (Orangutan, 290 Points) on 6/24/08 at 4:47am

this is what happens when, like Citi, you have a failed business model

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Citi was going to pull

by Devils Advocate (Senior Gorilla, 782 Points) on 6/24/08 at 7:32am

Citi was going to pull incoming analyst offers, but I did not know it was close to 40%...wow..

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Apologies for the repeated

by valuebanker (Chimp, 1 Points) on 6/24/08 at 10:12am

Apologies for the repeated question, but any word on junior bankers being cut from the boutiques(PW/GHL/EVR//LAZ?

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One thing I don't get is why

by EnteringRealLife (Senior Baboon, 206 Points) on 6/24/08 at 1:03pm

One thing I don't get is why Citi would even take in a new class of analysts, when they're dumping current employees from the same division.

Plus, I don't think the laying off of employees is over, back in the 70s when the economy was slowing down and Wall Street was getting hammered the banks dumped 15% of their employees in one year, and then 12% the following year.

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Re:

by SBE (Baboon, 173 Points) on 6/24/08 at 5:24pm

I've also never understood this. As someone who will be going through FT recruiting this year, I am almost convinced that most banks will not be hiring.

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rumors

by GenghisKhan (Orangutan, 330 Points) on 6/24/08 at 10:20pm

I agree with nystate that you should not let the anxiety paralyze you into panicking at every new rumor.

My information comes from a number of long-time friends, including a couple at the group head level who were complaining about the depth of the reductions their groups were taking.

I don't think it will be the norm, but that percentage is not out of the question for some groups. One friend pointed to the direct placement issue as driving the need for the offer revocations. In other years, the question might have been deferred until group placements were final.

Whatever the case may be, I'd point out that Citi's cuts will not likely be as traumatic as JPM's a few weeks back. Several groups I knew well were effectively gutted in order to rationalize the headcount and accomodate a large influx of Bear people.

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No incoming class, but this

by GameTheory (King Kong, 1393 Points) on 6/24/08 at 11:03pm

No incoming class, but this swing of the axe has certainly taken a fair share of analyst and associate heads. I work with a few former Citi guys and about I'd say about 25% of their peers are gone.

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JPM

by SBE (Baboon, 173 Points) on 6/25/08 at 11:50am

Yep, there were some major cuts at JPM a couple weeks ago that seemed to fly under the radar a bit. A few good friends were axed essentially out of nowhere.

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