Citigroup Announces 52,000 Job Cuts

Nov. 17, 2008— -- In the largest round of layoffs since this financial crisis began, Citigroup announced Monday that it would cut its global work force by an estimated 52,000 jobs in the coming months, either by attrition, outright layoffs or by selling some of its businesses.

In December 2007, Citigroup had 375,000 employees. By the middle of next year, the bank says that number will be weaned down to 300,000.

Half of the job cuts will come from overseas banking operations, and the other half, about 26,000 jobs, will be lost in the U.S. Industry analysts say the majority of these cuts are in mid-level positions; these are not Wall Street "fat cats," but everyday Americans.

"The vast majority of the people getting laid off, themselves, are not bad characters, you know, they were just doing their jobs," said David Trone, banking analyst at Fox-Pitt Kelton. "Then, of course, when their pay goes down, they spend less and it affects all Americans indirectly."

An unforeseen circumstance of layoffs is less tax revenue for the government.

In New York State alone, the top 16 banks paid $173 million in state taxes in June last year; this year, they paid just $5 million, and that was before the crisis really took hold.

As banks trim jobs and budgets, they will look to increase their revenues elsewhere, which could mean higher fees for customers on credit cards and loans.