Nearly 2,000 layoffs will occur within the institutional clients group, of which investment banking is a part. The rest of the jobs will likely be eliminated in technology and operations divisions.
"Moving jobs to what Corbat called 'lower-cost locations' will be integral to the plan," Waybill noted. "So, I'm guessing he expects to lose even more employees through attrition when he tells them they'll have to leave the well-to-do suburbs and bedroom communities for offices in low rent districts downtown...or the slums."
Citigroup also plans to capitalize on automation technologies to replace expensive and inefficient workers with computers.
"There's a huge misconception about the importance of frontline workers," Waybill explained. "Part of that myth has been promulgated by unions. Employees also perpetuate the fallacy by describing themselves as cogs in a big corporate machine. But the reality is that cogs are expensive and difficult to replace. And they turn a lot smoother with a machine at the controls, not a supervisor who needs medical benefits and days off and breaks."
The 11,000 employees on the chopping block are simply not vital to the survival of Citigroup, in Waybill's estimation.
"Consider for a moment that we accept their 'galley slave' metaphor," he offered. "Sure, those slaves man the oars and power the ship, but without a strong captain and able officers at the helm, that ship won't know where to go. The galley slaves will simply propel it onto the rocks and scuttle it. The same applies at Citigroup. They need highly compensated executives to guide the ship. Any moron can row, if you know what I mean. But Citi can't afford to cut the fat from the top. So, those executive bonuses must happen."
When asked about the impact the layoffs would have on unemployment numbers, Waybill scoffed: "I hear Starbucks is opening 1,500 new cafes. I'm sure some IT guy with a pedigree like Citigroup can easily land a job as a barista. Plus, it's Christmastime. Seasonal jobs are flourishing now, and more companies are in hiring mode. Honestly, canning these people right before the holidays demonstrates a level of humanity in Corbat that other CEOs seem to be lacking."
(c) 2012. See disclaimers.