Oh goody, Citibank laid off almost 5% of their workforce RIGHT BEFORE THE HOLIDAYS, and this of course invites serious analysis about a variety of important topics. Like: what will these people and their families do vis a vis jobs? What about the fact that taxpayers bailed out Citi to the tune of $45 billion — does this create a sort of a social contract between Citi and the taxpayers and did Citi break it by laying these people off right before the holidays? What about the fact that recently-departed CEO Vikram Pandit took home over $200 million over the course of his five years at this company — was that appropriate in retrospect, considering that Citi is now engaging in massive layoffs, and if it’s not, what steps should Citi take to ensure that executive pay packages are reasonable?
Except NONE of these topics were explored on CNBC, who devoted their Citi segment to discussing What This Means for the shareholders and for the market, which appeared to be pleased by Citi’s human sacrifice.
According to some guy from JMP Securities, these layoffs make sense. Citi had “fat to churn,” and a large “bureaucracy,” and needed to “streamline” and whatnot. The market had been demanding human sacrifice for “some time,” so this makes sense. Then he rambles on about failed political leadership in the EU, and stuff like “what the president was talking about.” The bottom line is that this uncertain environment is making “Corporate CEOs to not want to transact.” Hence, paycuts for themselves massive layoffs. So yeah, this has nothing to do with poor corporate leadership. It’s “macro,” and also too, the fiscal cliff, and the uncertain economic environment. And let’s not forget about sovereign debt issues, which present “binary” problems. It’ ALL OF THEM, KATIE, ALL OF THEM, except poor corporate decision-making, and also, who cares since Citi’s stock prices just soared and ergo de facto, they are doing something right.