As it battles plunging earnings, Citigroup Inc. announced today that it would slash headcount by 50,000 and reduce expenses by 20% in the near term. It’s unclear what those moves will mean for CitiFinancial Auto, the bank’s auto unit.
Since being rumored for sale late last year, CitiFinancial Auto has instituted measures meant to streamline operations and cut costs. Earlier this year, the unit fired at least 20% of its workforce, closed half of its 140 loan-production offices, and stopped accepting loans from about 3,000 of its 14,000 dealers. The result: a 33% reduction in origination volume.
Will the auto division withstand closure? Only time will tell.
I hope they make it. It is a very useful program when they are funded and buying according to their published guidelines. Can those deals go somewhere lese? Sure they can but Citi is a good partner and has been for years.
I honestly believe this is a company that will survive. Auto has made them plenty of profit, and is not the product causing them the major issues. Citi Financial has $141,696 ($ in million) cash, and $138,265 ($ in million) cash flow. Of course these numbers are per balance sheet.
I would worry if I was on their mortgage product, or even their credit card. I think that society will keep their autos, as they cannot afford their homes, and they can get another credit card later. In some of my discussions, with friends, family, etc., I hear more and more people utilizing their check card (dealing in cash), and not worring about their credit cards. This is not just in a certain FICO score range either (I would believe. I do not know everyones FICO score).
I pray for the employees everyday! Both my daughters work for Citi and were laid off on the Auto side then re-hired 4 months later on the repo side. The sad issue is that everyone in the world is aware of the lay offs, each having their own opinion, yet the employees themselves still are waiting to hear who will be effected. For those of us who have suffered and survived through major lay-offs, lost our homes, adjusting to income far below our standard way of life and yet, come out ALIVE.
Instead of all our gloom and doom, maybe we should look at offering folks a support group where they can be heard. We have already seen increases in crime and sucicides, but are we prepared to support the millions of americans who will be laid off if the Big 3 do not receive the funding they are requesting and file BK?
I simply pray Citifinanial will stay intact ..more people with out jobs..
It will be interesting to see how the portfolios of the credit unions perform, and if they priced their loans to cover the risk of their non-prime paper.