Shallow management at Citi these days

I was wondering when the bloom was going to be off Chuck Prince's rose when he took over from financial legend Sandy Weill at Citigroup, Inc. (NYSE: C) years back. Since Weill engineered some of the most stunning financial company mergers in the last few decades and positioned Citi to become the pre-eminent financial services company on a global scale, Prince had quite a bit to live up to.

Is that effort already over so short a time into Prince's tenure? As Peter Cohan wrote yesterday, Citi is possibly looking to buy a hedge fund to get access to one of its managers and folding him into Citi's alternative assets group -- no big surprises were coming forward. Oh wait -- I forgot -- Prince wants to can 5.2% of the Citi workforce (upwards of 17,000 people) in Citi's largest restructuring in over 10 years. On top of that, Prince intends to send 9,500 additional positions into "lower-cost locations." Maybe he's been talking to Circuit City's CEO or something. And as Douglas McIntyre mentioned, other banks aren't making such cuts.

If it's true that all these cuts are meant to save money and to get Citi's alternative assets arm bringing in some impressive returns and business, then that's the company's right. Or is it? I just love it when thousands of job cuts meant to trim excess expenses wait until the last second. Could Citi have needed these layoffs a few years ago? Probably -- there is almost always excess capacity in any company just waiting for the ax.

It seems like leaders wait until prompted by something to take action, which is a ludicrous mistake. RIF, right-sizing, what ever you want to call it, are usually a last-ditch effort to get profitability up by reducing expenses. They are not a sound business move meant to align the company's business needs with its headcount.

[Disclosure: I own C shares as of 4-12-07]