Citi Pares Structured Credit Group
Citigroup let go some 30 members of its structured credit team, representing nearly a third of the group's total size. Some of the casualties, which were expected, were in London.
"We make targeted reductions from time to time to position our businesses in line with economic realities,'" a Citi spokeswoman told Bloomberg News.
An internal memo from Paco Ybarra, Citigroup's head of fixed income, currencies and commodities, omitted mention of the layoffs and focused on a reorganization of the Structured Credit Products group. The memo was published by the New York Times's Dealbook.
According to the memo, Carey Lathrop, Head of Global Credit Trading; Jeff Perlowitz, head of Securitization; and Mark Tsesarsky, head of Special Situations Securitization will assume responsibility for Citi's Structured Credit Products. It continued:
The Illiquid Finance Group will be led by Kevin Bell and Michael Jinn, reporting to Paul Young. Paul will report to Jeff and Mark for activities related to Securitization and Carey for activities related to Credit Trading.
The Portfolio and Exotics Credit Derivatives Group, that will manage trading and structuring activities related to CDOs, Correlation, CLOs, Exotics and Liquid TRS and will be led by Mickey Bhatia, reporting to Carey. Within that Group, the ABS CDO and Correlation Trading activities will be led by Fred Jallot, reporting into Mickey and Jim De Mare, Global Head of Mortgage Trading.
The Global Portfolio Optimization group will be led by Ranjan Patwardhan and will report directly to me (Ybarra). GPO will be a customer of our Credit businesses and will operate as a conduit to provide the products and structures required to manage the risk of our Corporate Loans books.
Andrew Davidson, president of Andrew Davidson & Co., which consults with investors on mortgage- and asset-backed securities, told Bloomberg he expects to see similar cutbacks around Wall Street. "Issuance in structured credit, especially related to mortgages, is anemic at best, with little likelihood of a recovery anytime in the near future,'' he said.
Bloomberg said layoffs may also come soon at Merrill Lynch.