MEDIA ALERT: December 5, 2012
Robert H. Smith School of Business finance professor and former Citigroup Inc. senior executive Cliff Rossi has weighed in on Citi’s plans to cut 11,000 jobs from its global consumer-banking unit. The move entails closing 84 branches, including 44 in the U.S.:
“These latest cost-cutting measures get Citi focused back on efforts to improve their operating efficiency relative to their peers. Citi's dollars of revenue generated per employee lag behind their competitors and so this announcement is not surprising.
“Still these efforts are really short-term and do nothing to address Citi's longer-term prognosis.
“The company still has to address its legacy businesses that remain in Citi Holdings and to figure out strategically what direction the company needs to head. Ever since it lost the opportunity to buy Wachovia, it has operated in many U.S. banking markets at a competitive disadvantage to its peers due to its smaller branch footprint. It does have a significant international presence but finds itself carving off unprofitable segments overseas. Ultimately, for Citi to regain its prominence among the largest banking institutions, it will need to go well beyond cost-cutting measure and tackle the harder strategic questions of operating in a challenging environment.”
Prior to joining UMD as an executive-in-residence and Tyser Teaching Fellow in the Robert H. Smith School of Business, Rossi served as managing director and chief risk officer for Citi’s Consumer Lending Group where he was responsible for overseeing the risk of a $300+B global portfolio of mortgage, home equity, student loans and auto loans with 700 employees under his direction. While there he was intimately involved in Citi’s TARP and stress test activities.