Wednesday, January 16, 2008

Citigroup may cut 24,000 jobs as loans crisis grows

The fallout from America’s mortgage meltdown continued at Citigroup yesterday amid reports that the world’s biggest bank was poised to cut up to 24,000 jobs, that it planned a substantial dividend cut and that the Chinese Government had pulled out of a deal to inject about $2 billion (£1 billion).

The job losses, up to 8 per cent of Citigroup’s 300,000 staff, were reported by CNBC, the American television news network.

Citigroup is expected to announce a hefty dividend cut for the fourth quarter, perhaps by as much as half, which would save about $5 billion if maintained over a year.

Meanwhile, it became apparent that the state-owned China Development Bank had rejected an opportunity to invest after several weeks of discussions.

However, the bank is expected to say that it has agreed a multibillion-dollar injection from a consortium of Asian and Middle Eastern investors. Its balance sheet has been badly damaged by billions of dollars of losses on investments in sub-prime mortgages and it is expected to announce further sub-prime losses today, with some reports suggesting as much as $24 billion for the fourth quarter. Read more..

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