Employees of Securities unit of Citigroup Inc.(NYSE:C) to be sacked- CS, UBS, MS, GS, & RBS

Citigroup Inc. (NYSE:C) is planning to reduce its headcounts by 150 members and to slice off the bonus by 10%.

The decision of the company affected its stock badly. Reduction in bonus lowers down the value of the security while job cuts off affect 17,000 people and the economy at large.

The Citigroup Inc. (NYSE: C) CEO, Michael Corbett, having come as a replacement of Mr. Vikram Pandit just a month ago came across the problem of corporate trading slump, capital requirement inflow, Investment banking proceeds and the debt crisis in Europe. While all its competitors focused on reducing their costs the bank decided to have a job cut and reduced bonus plan.

In order to reduce the costs incurred, Citigroup Inc. (NYSE:C) is left with no other choice but to reduce its headcount.

Not only Citigroup Inc. (NYSE:C) but its rivals Goldman Sachs Group, Inc. (NYSE: GS), Morgan Stanley (NYSE:MS) and UBS AG (USA) (NYSE:UBS) is also concentrating on cost cutting during this slack period.

Reducing Staff:

The company is now engaged in cutting down the jobs and disposal of fixed assets in order to prevent a future fiscal crisis.

According to some analysis the bank should follow a stricter plan of reduction of headcounts, severe cost cutting and disposal of assets in order to earn at least half of the income, it earned in the past.

Citigroup Inc. (NYSE:C) announced a job cut off up to a tune of 1200 personnel.

Bonus Reduction:

The bonus reduction plan of the company is not tough enough. As they are planning merely a 10% reduction in bonus, which is quite negligible as compared to last year’s plan of reducing the bonus by 30%.

To some extent the economy is also affecting the banking group environment. The economic slumps and reduction of share value in the market adversely affect its fiscal plans.

Equity Trading:

This unit is also not deprived with the plan of cost cutting. The revenue generated thus is reduced to 9% at $ 1.96 billion.

1200 headcounts reduced the cost by $600 million. Whereas expenses down by 5% results a cost cut of $10.8 billion year to date. Its stock went up by 34% for the current year.

Job Cuts:

In order to pay attention on wealth investment, the CEO of the largest Swiss bank UBS AG (USA) (NYSE:UBS), declared 10,000 positions of job cuts.

The second largest Swiss bank Credit Suisse Group AG (NYSE:CS) announced 100 job eliminations to plan its cost cutting programs.

Earlier this year most of the equity trading unit of Royal Bank of Scotland Group plc (NYSE:RBS) was eliminated as a result of cost cutting.

The share price of Citigroup Inc. (NYSE: C) is down by 1.82% to close at 34.57 USD

The share price of Credit Suisse Group AG (ADR) (NYSE:CS) is down by 0.13% to close at 23.61 USD

The share price of Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) is down by 1.04% to close at 9.51 USD

The share price of UBS AG (USA) (NYSE:UBS) is up by 0.77% to close at 15.71 USD

The share price of Morgan Stanley (NYSE:MS) is up by 0.06% to close at 16.87 USD

The share price of Goldman Sachs Group, Inc. (NYSE:GS) is down by 0.79% to close at 117.79 USD

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing. http://www.facebook.com/ben.rouss