The global meltdown showed its ugly face on Monday when Citigroup Inc announced to slash 50,000 jobs as souring economies and global credit conditions have caused the American banking giant with the farthest reach worldwide to retrench

The cuts are chief executive Vikram Pandit’s most dramatic move yet to restore profitability and bolster a sagging share price. Last week, Citigroup stock fell into single digits for the first time since Sanford ’Sandy’ Weill created the bank in 1998 from the merger of Travelers Group Inc and Citicorp.
Shares of Citigroup fell 18 cents to $9.34 in premarket trading.

Pandit became the chief executive last December, and has faced much criticism from investors and others for failing to implement a workable turnaround plan for Citigroup.
The New York-based bank lost more than $20 billion last year, hit by bad bets on complex and risky debt, often tied to mortgages. Some analysts say the bank might not be profitable before 2010.


On Friday (November 14), shares of Citigroup fell 68 per cent, leaving the bank with a market value of only $51.9 billion, barely twice the $25 billion of capital it received from the US Treasury Department’s bank bailout plan.


Citigroup was built principally by Weill, who ceded control to Pandit’s predecessor, Charles Prince, in 2003.


Analysts believe Citigroup never invested enough in technology or to make the bank’s parts work well together.
Its geographic diversity, including operations in more than 100 countries, is now also working against it as customers in countries like Brazil, India and Mexico are finding it hard to keep up with their bills.


At the same time, Citigroup’s ability to grow at home is relatively limited. Last month, Wells Fargo & Co derailed Citigroup’s attempt to buy Wachovia Corp and its $418.8 billion of deposits.