Citigroup's Pandit Tries Again

This morning's news was full of stories concerning Citigroup Pandit's 'townhall' meeting and his announcement that the firm is cutting some 25,000 positions, in addition to plans to sell some small units, and previously-announced cuts, all totaling 50,000.

The nearby, Yahoo-sourced chart of the prices of Citigroup's equity and the S&P500 Index for the past five days indicates Pandit's latest attempt to mollify investors didn't work, either.

While the S&P declined by about 5% in the past five trading days, Citi sank by 20%.

Today alone, as the second chart, below, illustrates, Citigroup's stock price fell by more than 5%, while the Index fell roughly 2.6%.

Various pundits opined that Pandit continues to resist calls to breakup Citigroup's non-performing, dysfunctional business collection. Bob Rubin's head has also been called for.

Even Pandit was rumored to be at risk as the board argues over what to do about Citigroup's dire straits.

As a Wall Street Journal Online piece reported this afternoon,

""We have spent the last year getting fit, are more streamlined, and are in a strong competitive position to take advantage of future opportunities," Mr. Pandit said, according to his prepared remarks. "We will be the long-term winner in this industry."

Still, Mr. Pandit cautioned that tough times may lie ahead. "There is still a lot of rebalancing ahead of us," he said. In a memo distributed to employees after the town hall, he noted that "the coming year could be a difficult one for our clients and customers."

About 15,000 Citigroup employees either attended or tuned in for the town hall, which was closed to investors, analysts and reporters. Some had lukewarm reactions.

Since becoming CEO, Mr. Pandit, a former finance professor, has frustrated some executives and directors with his academic style. Some employees said Monday's presentation fit that mold, dwelling on financial issues without doing much to pep up Citigroup's dispirited troops."

Pandit clearly has no clear grasp on the severity of Citigroup's problems. He's been in the job nearly a year, yet look at the firm's performance, as seen in the third Yahoo-sourced chart.

Citigroup has declined by about 70%, while the S&P has lost a relatively modest, by comparison, 40% over the past twelve months.

Yet Pandit has offered nothing in the way of strategic change at Citigroup. It's entirely possible that, like Rick Wagoner's GM, Pandit's Citigroup won't make it long enough to see those 'future opportunities.'

Perhaps the real problem at Citigroup is so much overhead to stitch together businesses which have little in common, and, for the most part, simply have over-capacity in this new, credit-constrained environment.