"Why did citigroup cut 50,000 jobs when they received a big bailout?"

NEW YORK (CNNMoney.com) -- Citigroup unveiled bold plans Monday to cut more than 50,000 jobs, the latest move by the struggling bank to cut costs in order to weather the credit crisis plaguing Wall Street.

Making the announcement just before the opening bell, the company said it would reduce its workforce to approximately 300,000 employees. As of the end of September, the New York City-based bank had about 352,000 employees.

Citigroup CEO Vikram Pandit, who was appointed last December following the hasty departure of former chief Charles Prince, addressed the job cuts at an employee town hall meeting held Monday morning.

"There is nothing easy about these decisions and the impact on our people,"
Pandit told employees. "We do this because we must and not because we want to."

Roughly half of those jobs would come as a result of divestitures, a company spokesperson said, such as the company's soon-to-be-completed sale of its German retail banking unit. The remainder would touch all divisions of the company, both domestically and internationally.

Last week, there was speculation that the company's investment banking unit would be among those divisions to feel the brunt of the cuts as business has been at a virtual standstill in recent months.

Most of the cuts are expected to take place by year end before trailing off sometime in 2009. What remains unclear is whether more layoffs could follow.

A source familiar with the situation said that top management at Citigroup has taken to the idea of doing more with fewer workers, effectively leaving the door open to more cuts down the road.

Citigroup to Cut 50,000 Jobs

Citigroup said Monday that it would eliminate more than 50,000 jobs, in addition to cuts it had already announced, as the global banking giant hunkers down to weather the harshest financial environment in decades.

The cuts were disclosed as part of a town hall meeting that Citi’s chief executive, Vikram Pandit, held Monday morning to address the state of the firm. Mr. Pandit’s presentation, which was later posted on Citi’s Web site, indicated that the company planned to reduce its workforce, which stood at about 352,000 at the end of September, to roughly 300,000 “in the near-term.”

Most of the layoffs would come through attrition and the sale of business units, the bank said, meaning the actual number of layoffs could be less at the bank.

However the cuts are made, they would represent an overall drop of 20 percent in Citi’s headcount since its peak of 375,000 in the fourth quarter of 2007, Citi said.

While the cuts will come across the company, investment bankers are expected to bear the brunt of the loses because senior managers have been asked to reduce expenses significantly, The New York Times’s Eric Dash reported Monday morning. But back-office functions, like the bank’s legal and human resources divisions, are also expected to be hard hit.

“I want to talk with you about our accomplishments over the last eleven months and why despite the major challenges currently facing our industry and the economy I continue to be optimistic about the future,” Mr. Pandit wrote in a memo to employees inviting them to Monday’s town hall meeting.

In Monday’s presentation, Citi emphasized the steps it has already taken to shore up its balance sheet amid a steep drop in the value of mortgage-backed securities that has ravaged many Wall Street firms and big lenders. Citi also faces potential problems in the consumer side of its business, especially in its credit-card arm, which could experience a big jump in charge-offs if card holders can’t pay their bills.

Citi has raised $9.4 billion in Tier 1 capital — a widely followed measure of financial strength — from divesting businesses, it said. In addition, it has added $75 billion in capital by selling equity to the government and through public and private offerings of stock.