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“We are a bank,” Vikram Pandit recently told employees of Citigroup, the Wall Street banking conglomerate that Pandit heads.
Perhaps he thought it would be comforting for employees to hear the CEO say that at least he knows what business they’re in. But then he asked, “What does a bank do?” That definitely was not a comforting question.
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Indeed, Pandit’s utterances were a bizarre prelude to the real, totally-discomforting purpose of the meeting, which was to announce that 53,000 Citigroup employees were being booted out the door – the largest mass firing in American corporate history. This is on top of 23,000 Citigroupers who had already gotten pink slips this year.
Citigroup, once the most valuable financial company in the nation, became a sprawling giant through the loosy-goosy deregulation policies of the past decade, and its top executives bet heavily on the speculative racket built on risky subprime mortgages. It was an awful bet. Citigroup has lost billions of dollars in the past year, and its stock price has plummeted.
So, now, Pandit says the employees have to take the hit. He brags that such wholesale downsizing is a sign of his executive boldness, referring to it as corporate “shock therapy.” As you might expect, however, Mr. Bold himself is not going to share in the shock. He is taking no cut in his $216 million pay, nor has he even been modest enough to say that he’ll forgo any bonus this year for presiding over Citigroup’s collapse.
Perhaps Pandit feels he deserves a bonus because of his chief achievement this year: getting $25 billion in bailout money from you and me.
Despite taking public money, Citigroup still has not increased its lending to help our economy. Excuse me, but if they’re not making loans and are slashing jobs, why are we bailing them out?
“Vikram Pandit’s payout from Citigroup: $216 million,” www.iht.com, March 14, 2008.
“Citigroup To Eliminate 52,000 Jobs,” The New York Times, November 18, 2008.
“Citigroup’s 53,000 job cuts are among highest n U.S. history,” Austin American Statesman, November 18, 2008.