Citigroup Inc is cutting 4,500 jobs worldwide, Chief Executive Vikram Pandit said on Tuesday, becoming the latest large bank to trim staff. Pandit said the cuts would be completed over “the next few quarters” and would come from a range of businesses.
1. What is the $400 million charge for?
2. How will this cut and cuts in general affect earnings quality?
3. Where will the charge be reported in the financial statements? Explain
Source: Rauch, Joe (2011)Citi cuts 4,500 jobs, will take $400 million charge. Reuters Dec. 7(Retrievable at http://in.reuters.com/article/2011/12/07/citigroup-layoffs-idINDEE7B50KG20111207)