Anyone that has not been living under a very large rock for the last year will be painfully aware that these are difficult times -- despite what US presidential hopeful John McCain's advisors might say.
Baby boomers are wondering if they can retire as early as they wanted to, some individuals are getting into debt just to buy groceries and other essentials, and the current oil-price crisis has achieved what once seemed impossible -- more and more Americans are considering buying smaller, more energy-efficient cars. (So the recession might at least prove good for the environment...)
The current economic climate sucks. Badly. So what, apart from laying off their employees left right and center, are financial services firms doing to cut costs and make themselves leaner, now that the sovereign wealth funds that were initially so generous have turned their attention to landmark buildings in New York?
It seems that some overseas operations are finding themselves superfluous. Citi just sold its German consumer banking business to French bank Credit Mutuel in a deal that will earn Citi around $4 billion after tax. Considering the firm's new CEO Vikram Pandit has pledged to sell off $400 billion of assets, you can't help thinking there is still a long way to go... And wondering how much will be left of the banking giant in the end?
One industry source told me that some banks are looking to outsource yet more functions that they have always done in-house. Many global banks for example that have built proprietary FIX networks are now turning to third-party network providers in a bid to remove unnecessary costs from their balance sheets. And proving that it is not just traders that have been affected by job cuts, Barclays recently announced it would axe 1800 UK IT jobs in favor of offshoring the work to centers of excellence around the world.
What else are firms doing to trim themselves down? What extra weight are they throwing overboard to keep their ships afloat? And how far can they take this strategy before they find themselves jettisoning the mast and sails and are forced to abandon ship?