To read all the press about the Citigroup layoff plan of late, it seems there are two main planks: first, fire about 17,000 people. Then take another 10,000 jobs or so, and move them out of New York to cheaper parts of the US, or move them out of the US entirely to cheaper parts of the world. Finally, take some untold number of extra people – in the tens of thousands – and simply don’t replace them when they leave for whatever reason.
But take another look at the story now that the announcement has actually been made:
Roughly 8 percent of Citigroup’s 327,000 workers, from entry-level consumer bankers to senior executives in the investment bank, will be affected by the restructuring. All five of its major business divisions will face cuts. About 1,600 jobs will be eliminated in New York City, where Citigroup currently has 27,000 employees.
If 8% of the total workforce is affected altogether, and if New York City is the most high-priced location, then one would expect much more than 8% of New York City’s employees to be affected.
In fact, however, it seems that Citigroup’s New York payrolls will only fall by 6% – which is less than the corporate average.
Is there less to this story than meets the eye? If payrolls aren’t being slashed in New York, it’s not clear where they are being slashed. Maybe in places like Tampa, Florida, where Citi has a big office with 3,000 people servicing Latin America; or in O’Fallon, Missouri, where CitiMortgage employs 4,750 people. If those places are hit more severely than New York, then maybe some of the rhetoric about cutting where costs are highest will sound a little hollow.