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Morning Coffee: Citigroup's safest people amidst the 20,000 job cuts. The prescription drug prompting delusion on trading floors

We thought we knew everything there was to know about Citi's ongoing process of cutting 20,000 jobs, but there are details we've missed. 

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Writing last week, Reuters said that while 5,000 of the jobs go at Citi will be managers culled in the 'Bora Bora' stripping back of management layers from 13 to eight, another 5,000 will come from selling businesses, and the final 10,000 will result from cutting heads in support functions like technology and operations. Reuters cites an official Citi source, who in turn cites Jane Fraser.

In other words, the most precarious seats at Citi are those of managers, developers and support staff. Citi managers are being cut in the first quarter of 2024; Citi technology and support staff are being eradicated all the way to 2026. 

Who's not for the chop? There's no mention of non-managerial revenue generators in Citi's headcount cuts. If you're a vice president in M&A or credit trading, you're presumably pretty safe. This makes sense - Citi has repeatedly said that the cuts won't affect its ability to bring money through the door, and are about reducing organizational bloat. The revenue workhorses are safe. 

The other safe seats at Citi should be in risk and controls, where the bank still says it wants to strengthen its hand (although it was spied cutting a senior conduct risk professional last week for reasons sources say were not entirely clear). 

Confusingly, though, technology staff often work in risk and controls, where systems are increasingly automated. Somehow, though, Citi needs to cut technology jobs down to size without affecting these teams. In April 2023, Citi said it had added 8,000 technology staff in the previous 12 months, an increase of around 30%. It now has two years to remove them all again. 

Separately, if you work in financial services you may have encountered the ubiquitous prescription medication Adderall, but beware.

Business Insider spoke to several young bankers who said Adderall is passed around like "candy" in their offices, and to one former banker-turned mental health professional who sounded a warning. "If you get to higher doses of Adderall, your thinking actually becomes a bit crazy and delusional. You start to lose touch with reality," he said. "At a high-enough dosage for a long period of time, you begin to demonstrate some symptoms of psychosis that are very similar to those of schizophrenia." 

Meanwhile...

It's a great time to be a DCM banker. It's been the busiest opening to the year for more than three decades. Investment-grade groups have issued $153bn worth of bonds this month, the highest year-to-date figure for dollar-denominated debt in records going back to 1990. (Financial Times) 

2023 was a good year for Citadel, TCI and Viking. The top 20 asset managers made profits for investors of $67bn in 2023 up from the previous record of $65bn in 2021. (Financial Times) 

Some past employees of KPMG say they have not had an inflation-linked rise in their pensions since 2008. Partners were given discretion over whether to increase the pensions or not.  (The Times)

Banking analyst Dick Bove is retiring aged 83. “It was the greatest job ever. I loved every minute of it, because it was so much fun.” (Bloomberg)  

There's a need for traders experienced in a trade that involves selling large volumes of put options that allow holders to offload shares above the current market level and to collect interest on the premium. “Nobody did this for 20 years because there wasn’t any interest rates...Interest rates are back. It makes sense." (Bloomberg) 

James Gorman received $37m last year, up from $31.5m in 2022, even though Morgan Stanley profits fell 18%. He also cashed-in $40m of Morgan Stanley stock. (Financial Times) 

Redburn Atlantic cut 10% of its employees. (Financial News) 

No one wanted to buy Credit Suisse's $250m distressed debt business. (Bloomberg) 

Everyone wants these slip-on shoes. (WSJ) 

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AUTHORSarah Butcher Global Editor

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