Call me old-fashioned. Call me a bleeding heart. Call me a babe in the financial woods.
But whatever you call me, you’re not going to quell the outrage I feel when I hear something like Citigroup’s announcement that it was going to get rid of 17,000 workers, or some 5.2% of its worldwide workforce of 327,000. However expertly you try to justify it, the thing stinks.
Essentially, 17,000 people are going to get the ax so that one person–in this case Citigroup CEO Charles Prince–can keep his job (at least for a little while longer).
Yeah, I know all the reasons that “investors” have been pressuring Prince to make such a move.
What Your Peers Are Reading
(As an aside, if this Prince finds that things get even more uncomfortable for him and decides that he needs more cover, maybe he should do what the singer Prince did for a while and change his name to a symbol that nobody can pronounce. It certainly brought a degree of (wanted or unwanted) anonymity to the Purple Rain crooner.)
But I digress. Getting back to the pressure from “investors.” The litany is so familiar at this point that one could recite it by rote. The corporation is bloated; the corporation has lost focus; the corporation’s expenses are rising too fast.
But the one that’s at the root of it and the one that all “investors” bring up first of all is that the price of the stock hasn’t kept up with that of the company’s competitors and/or the market in general.
Now let’s put things in a little perspective here. Citigroup used to be run by Sandy Weill, a legend who had a grand old time doing mergers and making acquisitions. Sometimes they worked and sometimes they didn’t. In fact, a lot of times they didn’t. But this didn’t prevent Mr. Weill from getting an outrageous salary, bonus, stock options and other perks.
Hey, you win a few, you lose a few.