52,000 jobs to be cut at Citigroup

NEW YORK -- "We will be the long-term winner in the industry," CEO Vikram Pandit said as he broke the news to employees in a meeting Monday at the No. 2 U.S. bank's New York headquarters.

Citigroup's reduction is the largest job-cut announcement from a company since 1993, when IBM cut 60,000 jobs, according to outplacement consultants Challenger Gray & Christmas. Citigroup's cuts Monday will affect 15% of its global workforce, and come on top of 23,000 jobs that have already been eliminated from January through September, for a total of 20% from its peak of 375,000 at the end of 2007. The company also said it would cut expenses 20%.

The news didn't do anything to help already battered Citigroup stock, which fell 7% to $8.89 Monday. Meanwhile, New York Attorney General Andrew Cuomo said Citigroup executives should forgo their 2008 bonuses because of what he called "disturbing" job cuts. On Sunday, Goldman Sachs executives announced they would give up 2008 bonuses.

A person with direct knowledge of the situation says Pandit intends to discuss compensation with Citigroup's board in coming days. The person wouldn't speak on the record because Pandit has not finalized his plans.

After less than a year as CEO, Pandit has come under severe criticism in recent months, especially after he failed in September to complete his acquisition of Wachovia's banking assets when rival Wells Fargo came in at the last minute with a better offer. Since then, rumors have swirled that Citigroup might look for a regional bank. However, the person with direct knowledge of the situation says Pandit does not plan to acquire a U.S. bank.

Some investors had hoped for more fundamental change such as Citigroup divesting some of the company's disparate businesses. "Cutting headcount seems like a fairly mundane strategy," says Walter Todd at Greenwood Capital Associates.