Wall Street’s largest financial services firms, is planning its second round of large-scale layoffs in less than a year, CNBC has learned.
People inside Citigroup say the firm hasn’t set a target number of cuts from its roughly 320,000 employees. But people with knowledge of the matter have described the pending job reductions as "massive" and "large." The total number could reach as high as 45,000, these people estimate.
In a statement, Citigroup said: "We are engaged in a planning process in anticipation of our new CEO and our business heads are planning ways in which we can be more efficient and cost effective to position our businesses in line with economic realities. Any reports on specific numbers are not factual."
For the last month or so I have been deeply critical of anyone who is looking to go long financial companies. This story illustrates why. The subrpime mess is going to hurt this industry for some time to come. The recent announcements of lay-offs and writedowns is a prelude to what we're going to be seeing for awhile. My guess is the minumum amount of time this will occur is at least 6 months -- and that is just a guess. In other words -- this chart is good for nothing but shorting: