Citigroup Gets Thrifty: Cuts Color Copies, BlackBerrys

NEW YORK (AP) -- Citigroup Inc. isn't just eliminating jobs to slash costs -- it's also clamping down on color copying and BlackBerrys.

In a recent memo to Citigroup employees detailing new efforts to trim expenses, John Havens -- who runs the company's institutional clients group -- wrote that "color copying and printing should only be used for client presentations," and that "presentations should be printed double-sided to reduce unnecessary paper usage."

Additionally, the bank is reviewing employees' BlackBerry use, and is now requiring pre-approval for the devices.

"Only necessary business related calls will be reimbursed," the memo said.

The memo, dated Aug. 15, also said that Citigroup will no longer hold meetings outside its own facilities for internal purposes, and that it is limiting external training and the use of management consultants, among other resources.

The moves are yet another step in the bank's attempt to become profitable again after three straight quarters of losses. Citigroup, currently the nation's largest bank by assets, has already eliminated more than 14,000 jobs this year and raised about $40 billion in capital after losing a cumulative $17.4 billion during the last quarter of 2007 and the first two quarters of this year.

The bank has been selling off its assets as well. During the second quarter, Citi lopped off $99 billion from its total assets, which stood at $2.02 trillion as of June 30. In May, Chief Executive Vikram Pandit announced that the bank would reduce its balance sheet by about $400 billion to $500 billion over the next few years.

Citigroup shares rose 23 cents, or 1.3 percent, to $17.84 Tuesday.

Analysts are split over whether Citigroup will post a profit for the third quarter, but on average, they expect a profit of 3 cents per share, according to Thomson Financial.

Comments

[Bobzmcishl]

This is the typical way corporations respond when times are bad; they should do it all the time. Worldcom cut off the free donuts and coffee, but it was too late for them. There is the myth that big business is so efficient. In actuality they are very wasteful of resources. But worst of all the corporate CEO's have a herd mentality that causes "walk off a cliff" thinking. It is incredulous to say the least how so many banks drank the sub-prime koolaid and now we all all paying for their lack of any adult supervision.

[Indubio]

You're descriptions of "big business" are accurate. People studying bureaucratic mentality understand that large corporate and big government bureaucracies have much in common; neither are terribly efficient or capable of rapid innovation and both can be extremely wasteful. It's unrealistic to believe that mega conglomerates can or should behave fundamentally different then large public agencies. The problem for Americans is that we've been sold on the notion that there are significant behavioral differences and that we should trust corporations but not public agencies: This defies comprehension. Although all large bureaucracies focus on maintenance of the status quo and survival, which often means that bureaucracies often works at cross purposes to management's stated objectives, corporations operate at a profit while public agencies, at least in theory (and the Bush administration not withstanding), operate for the benefit of citizens. A significant and often overlooked difference: CEOs and corporate boards often employ a short term mentality to maximize quarterly profits while public agencies think on a longer term basis. Further, CEOs and board members are often the prime beneficiaries of short-term strategies (this is, of course, purely coincidental): Take a troubled company and "turn it around," rake in a huge bonus, and then retire...t­his is the mentality that often drives corporate management and it represents capitalism at its worst. Rarely is the top leadership of a large public bureaucracy (excepting the Bush administration) accused of plundering the budget or selling assets for personal gain.

[rwe2late]

Another key difference worth mentioning is that public agencies are presumably more PUBLIC. Corporations can and do operate in secret, and are thus shielded from scrutiny and criticism. Unfortunately, the Bush administration has greatly increased the secrecy about government operations. Needless to say, without an informed citizenry, there cannot realistically be genuine democracy.

Privatization of government functions is a major cause for the loss of democracy. Coupled with the growth of secretive authoritarian defense and "security" agencies and out-of-control contractors, it is a DISASTER.

[aflurry]

good post.

the "efficiency of the private sector" is a sales pitch like everything else. there are many under-acknowledged trade-offs between private and public organization. however, the blame for our inability to have a coherent national conversation about the relative merits of each falls mainly on the private sector. it must cloud the issues and mask its own deficiencies in the quest for profit.

I'm a little stumped by the tone of the AP article though. sure, it's probably a sign of trouble at Citibank. But why in the world would a business not try to control expensive color copying of takeout menus and resort brochures, or texting all your bros in trading about last nights hookup?

[vegasobserver]

How about pay cuts for the CEO and the minions in his inner circle?

NOoooooooo, they would never consider that now, would they?

But cuts for the peons, of course!!!! Let them eat stale bagels, while the CEO and the other fatcats on the board eat caviar and sip Dom Perignon!!

Typical Corporate America BS!!!

[Opt1musPr1me]

Exactly. These corporate giants are always looking to cut out little things like paper and blackberrys but still hand out big bonuses to their top execs.

[aflurry]

actually, i disagree. the shareholders are supposed to control executive pay. it is coming out of their pockets directly. if they don't like the pay structure, they should vote with their trade tickets.

there always seems to be an assumption that if the executives were paid less, the extra money would go to the tellers and security guards. it just ain't true.

[carlgt1]

penny wise, pound foolish?

[rodeman]

Kind of like putting a bandaid on a gaping wound....?­?

[WIpatriot]

EXACTLY the phrase that came to mind, carl.

[skatscan]

Well, that explains why they didn't get the "eld" put up on the citifield sign at the new New York Mets ballpark