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Citi drops profits, then jobs

Citi drops profits, then jobs

(24 April 2008 – Global) Citigroup has reported a loss of more than $5 billion for the first quarter, while also indicating 9000 more jobs cuts during the next quarter. The net result was a loss of $US5.1 billion ($A5.5 billion), stemming from write downs of nearly $US14 billion and losses from consumer products such as credit-card and home-equity loans.

According to Gary Crittenden, chief financial officer for Citigroup, the bank plans to cut 9000 more jobs during the second quarter. He also added that the new round of layoffs will come on top of the 4200 job cuts that Citi made in the last quarter.

The reasoning that he gave for the extra job cuts was simply because Citi is focusing on expense management.

Revenues were $US13.2 billion, down 48 percent, largely driven by significant write-downs in sub-prime related direct exposures in fixed income markets and highly leveraged finance commitments.

Vikram Pandit, chief executive officer of Citi said that their financial results reflect the continuation of the unprecedented market and credit environment and its impact on their historical risk positions.

He added that during the first quarter, valuations of the bank’s sub-prime related exposures in fixed income markets and leveraged finance assets have further declined and credit costs in our consumer lending businesses have increased.
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