July 20, 2009
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News: CitiGroup Galant Shakes Up Management
A big shakeup at Citigroup has sent some management walking and others concerned about job security. Citigroup Inc. the nation's fourth largest credit card company, reported a $2.4 billion operating cost last quarter. A major portion of that was a result of record breaking defaults. Paul Galant, the credit card unit's chief of operations has had enough. Galant made several changes to the unit's management team which has stirred the pot. Ed Garofalo will no longer oversee Citi's branded credit card business; he will now head a mass market group as well as senior leader of card strategy and operations outside the U.S. Galant also appointed Terry O'Neil as team leader of a group dedicated to "spend-centri" high creditworthy customers. Galant also assigned Debjani Majumdar as manager of "high risk" accounts to assist in minimizing risks.
In April, Vikram Pandit, Citigroup's Chief Executive Officer, positioned Galant to head the card unit in the midst of new credit card reform that goes into effect February 2010. Galant replaced Steven Freiberg, who managed the credit card unit as it continued to sink further and further down under surmounting delinquencies and debt defaults. Citi suffered surmountable defaults in second quarter; to the tune of $211 million. Last year same period, Citi realized a $428 million profit. According to Samuel Wang, a Citigroup spokesperson, Galant made the announcement in a memo to the company's employees which said "Our business is going to be fundamentally transformed over the coming months."
Citigroup recently notified their customers of a change in interest rates and terms. Customer's were given an opt-out choice which requires they shut down their account to future use. Other card companies are also scrambling to make changes in interest rates, fees, and terms to beat out the new credit card reform bill that goes into effect February 2010. Citigroup follows JPMorgan Chase, Discover, Capital One, and Bank of America who have all taken the extra time to take one last shot at burning consumers.