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11 Firms That Overdid the Layoffs

Rick Newman | Sept 17, 2010 | US

In the midst of a lot of shocking news, it stood out: In November 2008, Citigroup announced it would lay off more than 50,000 people, or one-seventh of its global workforce. Most companies don’t even have 50,000 employees, and those that do could barely function if so many workers left at once. Yet Citigroup was in desperate straits, with a plunging stock price that bottomed out near a buck and financial woes that would force a second bailout from the U.S. government. Some worried that the feds might even nationalize the bank. The only company that axed more workers than Citigroup during the recession was General Motors—which declared bankruptcy.

[In pictures: 11 Companies That Shrank Too Much.]

Citigroup has since withdrawn its S.O.S. and posted another sign: We’re hiring. According to job-search firm, Citigroup is on the hunt for about 2,000 new workers, ranging from executive assistants to computer programmers to financial analysts. Nearly 1,000 of those jobs pay $70,000 or more. Most of the openings are clustered near Citigroup’s New York City headquarters, but the bank is also hiring dozens of people in New Jersey, Tampa, and Irving, Texas.

Citigroup’s hiring spurt doesn’t mean the sprawling bank will ever return to its former size. Like other big firms, Citi had grown so fat it was almost unmanageable, and the financial crisis that threatened its solvency also prompted a badly needed slimdown. But Citi’s crash diet reflects another phenomenon that’s reshaping America’s labor market: Many companies lack detailed information about their own workforce, which has caused some of them to lay off workers they need along with many they don’t. Now, some of those firms are replacing people they never should have gotten rid of in the first place. “A lot of companies lacked the organizational agility to respond to the recession,” says Cathy Farley of consulting firm Accenture. “Companies are now organizing themselves more flexibly.”

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