Citigroup Announces 52,000 Layoffs, Other Cost Cutting Measures

January 1, 2009 8:44 a.m. EST

New York, NY (AHN) - In a memorandum to Citigroup employees, company chief executive officer Vikram Pandit and chairman Win Bischoff outlined some of the steps the company is taking to cut costs.

Citigroup will lay off 52,000 workers worldwide after it incurred losses due to bad loans and bad investments for the fourth straight quarter. Pandit said Citigroup expects major challenges to continue into 2009.

It will also restrict exit pay and exclusion of five senior executives whose compensation are on Citigroup's proxy statement from receiving severance pay. Pandit identified in an email the five as himself, Bischoff, chief financial officer Gary Crittenden and vice chairmen Lewis Kaden and Stephen Volk.

Also in the memorandum, Pandit and Bischoff said the firm will limit executive pay and officers will forego their 2008 bonuses following the receipt of a $45 billion bailout and loss of three-quarters of its market value.

Citigroup and other Wall Street firms have accumulated over $1 trillion in losses in their global operations since 2007, leading bank executives to give up their bonuses, which usually make up two-thirds of the compensation package of finance firm executives.

Aside from Pandit and Bischoff, Citigroup adviser Robert Rubin also gave up his bonus for the second consecutive year, while Goldman Sachs Group CEO Lloyd Blankfein and Morgan Stanley CEO John Mack also did not get any bonuses in 2008.

Pandit added executive pay will be tied up with performance. "We are fully committed to paying for high-performance people at all levels of the organization and at competitive rates, in the context of the company's overall financial results," Pandit said.