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17 November 2008 | 9669 views | 0
Stumbling banking giant Citigroup has stunned Wall Street by announcing plans for a further 52,000 job cuts.
Whew! 52,000 jobs at Citi are going to be axed. This must be a new record on job cuts by a running firm. Citi's communique in their town hall yesterday makes an interesting read. See
Clearly, with institutions jostling each other on job cuts, we are in for a long recession just by creating one! I really don't see the point here. How can world economies recover if companies keep putting more logs into the already raging fire? To cut
20% cost, surely, can't institutions simply enforce a wage cut across the board? Wouldn't that make more sense? At least you save on the severence pay and the overall morale remains high. Engaging in such a mass genocide of retrenchments is only going to drag
us down deeper into the morass. The investors aren't really impressed by such tactics. Stocks of companies making such announcements plummet further.
So, what do we do? Play the game by precedence or take a balanced view and attack costs without causing mass mayhem? I would firmly recommend the latter.
We have Troubled Asset Restructuruing Programs for banks. Going by the famous cliche -"employees are our most valuable assets" - staff in banks need a bailout scheme too!