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Uncertainty sends Citigroup lower | |
(about 3 hours later) | |
Shares in Citigroup, one of the biggest banks in the US, fell sharply on Friday amid ongoing uncertainty over the company's future. | |
The stock rose in early trade but later declined 13%, in advance of a board meeting later on Friday. | |
The Wall Street Journal reported that Citigroup was considering selling parts of the firm. There are also rumours it might merge with another firm. | |
Earlier in the week the firm announced 52,000 job losses worldwide. | |
These cuts came on top of previously announced reductions of 23,000 positions. | |
The total 75,000 job cuts represent a cut of about 20% of its staff, leaving it with 300,000 jobs worldwide "in the near term". | |
Shares in the firm have fallen sharply since the start of the year and are trading more than 80% down since January. | |
Saudi Prince Al-Waleed Bin Talal's decision to buy about $350m (£236m) of its shares on Thursday did not calm investors' nerves. | Saudi Prince Al-Waleed Bin Talal's decision to buy about $350m (£236m) of its shares on Thursday did not calm investors' nerves. |
But the firm insisted on Thursday that it had "very strong capital and liquidity position and a unique global franchise". | |
Investors are worried that future losses could threaten the bank's future. | |
'Bloodletting' | |
Citigroup has lost more than $20bn in the past year because of the global financial crisis. | Citigroup has lost more than $20bn in the past year because of the global financial crisis. |
Despite the sweeping job losses, the bank has maintained that its underlying business "remains strong and revenues have been stable". | Despite the sweeping job losses, the bank has maintained that its underlying business "remains strong and revenues have been stable". |
Other financial services companies will cut jobs in the near future according to Brian Sullivan, chief executive officer of executive search firm CTPartners. | Other financial services companies will cut jobs in the near future according to Brian Sullivan, chief executive officer of executive search firm CTPartners. |
"The bloodletting in the financial-services industry will accelerate in coming months, with job cuts doubling to about 350,000 worldwide by mid-2009," said Mr Sullivan. This figure is equivalent to 20% of the global workforce at financial companies before the credit crisis began, he said. | "The bloodletting in the financial-services industry will accelerate in coming months, with job cuts doubling to about 350,000 worldwide by mid-2009," said Mr Sullivan. This figure is equivalent to 20% of the global workforce at financial companies before the credit crisis began, he said. |
Meanwhile, Citigroup's chief executive, Vikram Pandit, has come under increasing pressure from critics who doubt his ability to turn around the company and survive the financial crisis. | Meanwhile, Citigroup's chief executive, Vikram Pandit, has come under increasing pressure from critics who doubt his ability to turn around the company and survive the financial crisis. |
The bank has reported four straight quarterly losses and some analysts believe the bank will not return to profitability until 2010. | The bank has reported four straight quarterly losses and some analysts believe the bank will not return to profitability until 2010. |
It is one of nine financial institutions receiving funds from the US government's bail-out programme. | It is one of nine financial institutions receiving funds from the US government's bail-out programme. |