Citi announced a slew of cost cutting measures today, all aimed at reversing the bank’s declining revenues and getting rid of the sad trombone that plays on loop in the lobby. A ban on offsite meetings, mandatory use of both sides of the paper when printing, and the curtailment of color copies (which will be enforced by physically removing many of the building’s color copiers, because apparently you can’t be trusted*) are all on the list of behaviors that will no longer be tolerated. At first glance they come off as merely asinine rules that won’t amount to jack. This assessment could not be further from the truth. In fact, we expect that they will contribute to the exact intended outcome senior execs at Citi are hoping for.
Look, Count Vikula isn’t stupid. He’s aware of the crippling adversity faced by Citi, and has come to terms with the fact that profitability and success are just not in the cards. Rather than spend the next few years beating around the bush as the stock drops to ten (two? whatever), he’s decided to take the next few months to sink this thing and pack it in. While he could get Jimmy Cayne about things and get it over in a matter of weeks, Vikram is smarter than that and realizes that at the end of this folly, there’ll be more loot in it for Vickie if he can’t be held directly accountable for the bank’s failure. Which is why he and the brain trust came up with the initiatives above, along with “no more computers,” “no more for pay market data,” “no new Blackberries,” “no food,” “no fun,” in an effort to get all of Citi’s employees to quit (let’s be honest– they’re not in it for the prestige). Then VP will shrug his shoulders and make a face as if to say, “Well I did everything I could,” board the place up, and finally take over the role he tells friends and family he was born to play: Morgan Stanley CEO. (More on his plans for John Mack later.)
Citigroup Limits Meetings, Pares Color Photo Copies [Bloomberg]
In Trimming Expenses, Citi Holds Back on Color Copying [Dealbook]
*Not unlike “Non Client Travel.” To wit: “We previously asked that non-client travel be limited to trips which are truly essential. However, it seems that we are not consistently adhering to that policy. Going forward, all non-client travel will require pre-approval. As an alternative to non-client travel, I encourage you to make use of our audio and video conference capabilities.”