Citigroup May Report Restructuring Plans ahead of Q1 Earnings -- WSJ

Mar.26.07 | About: Citigroup Inc. (C)

The Wall Street Journal reports people familiar with a restructuring plan at Citigroup say cost cutting plans could include 15,000 jobs, or about 5% of its global work force and a $1 billion charge. Citi is expected to make an announcement ahead of its Q1 earnings release scheduled April 16, which is followed by its annual meeting on the 17th. Citigroup-C-chart-03-23-07 The Journal points out the plan isn't final, and notes a source says one option for reducing headcount is to not replace some of the 30,000 - 50,000 employees that leave Citi annually. One of CEO Charles Prince's biggest problems is spending is exceeding revenue growth. Last year operating expenses increased 15% to $52b, while revenues rose only 7%. Citi's COO Robert Druskin, a close friend and longtime colleague of Prince's, is leading the restructuring planning and is said to have 150-200 areas under review. The Journal mentions Citi is considering whether to make a bid for ABN Amro in the ballpark of $80b, but suggests Prince will place a higher priority on the forthcoming restructuring plan.

Sources: The Wall Street Journal
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Stocks/ETFs to watch: Citigroup (NYSE:C). Competitors: Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), JP Morgan Chase (NYSE:JPM). ETFs: iShares Dow Jones US Financial Services (NYSEARCA:IYG), Financial Select Sector SPDR (NYSEARCA:XLF), KBW Bank ETF (NYSEARCA:KBE)

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