What is it about the holiday season that brings out the Scrooge in corporate chieftains?
Just before Christmas, Citigroup dumped 10,400 employees -- y'all have a nice holiday, now, you hear? Merrill Lynch offed 3,400; J.P. Morgan cut 5 percent of its employees; and Deutsche Bank punted 5,500.
The Citigroup firings were especially galling. This huge financial conglomerate is the product of last April's merger between Citibank and Travelers Group, the insurance giant that also owns the stock brokerage of Soloman Smith Barney. At the time of the merger, chief honcho Sanford Weill bragged that the unified companies would grow, rather than downsize, because they would be able to "cross-sell" -- the Citibank arm would sell its customers Travelers insurance, for example, while the company's insurance peddlers would also pressure customers to buy Citibank credit cards and Smith Barney index funds.
Of course, all this financial cross-selling under one corporate umbrella is illegal. The Glass Steagall Act, trying to prevent total financial meltdowns, erects legal firewalls between brokerages, banks, and insurance companies. No sweat, said the newly merging Citigroup executives -- we're lobbying in Congress to kill the Glass Steagall Act, so our outlawed empire will soon be legal.
Amazingly, financial regulators went along with this flagrant violation of the law, even though the industry's lobbyists actually failed to get Glass Steagall killed. So, Citigroup continues to operate, even though it is blatantly illegal.
It's operating poorly, too. Top managers don't like each other, cross-selling isn't working, and stock prices are down a third since the merger. But do the geniuses at the top pay the price? No -- 10,400 employees do, while CEO Weill took personal pay of $230 million from the company.
Scrooge at his worst wasn't that greedy.
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