Bloomberg - Evening Briefing - Citigroup peels the layers

Bloomberg Evening Briefing

Citigroup Chief Executive Officer Jane Fraser’s campaign to scale back the size of Wall Street’s blue behemoth apparently includes getting rid of five layers of management, leaving eight. This according to a presentation posted on the firm’s website Friday as it announced third-quarter results. Fraser has already cut large numbers of jobs and eliminated roughly 60 management committees. Her broader changes will ultimately amount to the financial giant’s biggest restructuring in two decades. New York-based Citigroup is abandoning its two core operating units and instead focusing on trading, banking, services, wealth management and US consumer offerings. The bank has already slashed 7,000 positions this year, and while it won’t reveal how many people will get fired in this massive shakeup, the number will likely be significant.

Here are today’s top stories

Saudi Arabia paused talks to normalize ties with Israel, a move that had been predicted in some quarters following the surprise attack by Hamas, in which the militant group killed more than 1,200 Israelis, and the resulting bombing campaign by Israel that Gaza authorities say has killed 1,500 Palestinians. Cut off from fuel, food or water as a result of Israel’s siege, Gazans raced to the south Friday as Israel warned more than a million people to flee, ahead of an expected ground invasion. The United Nations called such an evacuation “impossible.” As Gaza hospitals report overflows of patients and dwindling blood and supplies, the World Health Organization is reportedly warning that the evacuation would be a “death sentence” for many of the hospitalized. President Joe Biden, who has repeatedly stated his support for Israel in its response to the Hamas attack, said the US is coordinating with Arab countries and the UN to surge humanitarian aid to Gaza.

The struggle between Arabs and Jews over ownership of the Holy Land dates back more than a century and has given rise to seven major wars, including this one. To better understand how the Palestinians, Israel and the whole world arrived at this moment, we’ve created a guide to the conflict and its long history. 

A changing of the guard among the biggest buyers of US Treasuries has Wall Street veterans bracing for further pain in the world’s largest bond market. Increasingly absent are steady-handed investors including foreign governments, US commercial banks and the Federal Reserve. In their place, hedge funds, mutual funds, insurers and pensions are piling in. Unlike their more price-agnostic predecessors, the new buyer base is likely to demand a heavy premium to finance Washington’s spendthrift ways, especially with debt sales set to surge as deficits swell.

BlackRock clients pulled a net $13 billion from long-term investment funds, the first outflows since the onset of the pandemic in 2020. The redemptions are a sign that investors have preferred to keep cash on hand in money-market funds or in certain bond strategies while interest rates remain elevated. Analysts surveyed by Bloomberg were expecting $50 billion of inflows. “For the first time in nearly two decades, clients are earning a real return in cash and can wait for more policy and market certainty before re-risking,” Chief Executive Officer Larry Fink said.

The United Auto Workers’s historic standoff with Detroit’s three carmaking giants is centered on an age-old tension: The union says corporate greed is keeping workers from earning fair wages, while Ford, GM and and Stellantis say they can’t afford union demands. Well, as it turns out, the 10 individuals who’ve served as chief executives of the companies since 2010 have collected more than $1 billion of compensation. Meanwhile, wages of US auto workers—unionized or not—have declined around 17% in that time frame.

Ford Chief Executive Officer Jim Farley, who takes home $18.3 million. Photographer: Dia Dipasupil/Getty Images North America

Canon has begun selling its nanoimprint semiconductor manufacturing systems, seeking to claw back market share by positioning the technology as a simpler and more attainable alternative to the leading-edge tools of today. The Tokyo-based company’s new chipmaking machines can produce circuits equivalent to 5-nanometer scale when using extreme ultraviolet lithography (EUV), a field dominated by industry leader ASML Holding NV. Canon’s machinery may also add a new front in the US-China trade war, as the import of EUV machines—so far the only reliable method for fabricating 5nm chips and smaller—into China is prohibited by trade sanctions.

For more than a decade, Verizon Communications was the No. 1 US wireless provider by almost every metric that mattered. As recently as 2021 it commanded 40% of the mobile phone subscriber market and had a reputation for the best, most reliable network. Today, a series of strategic errors have left Verizon in a precarious position. Verizon is shedding more subscribers than it’s adding and has seen its market share shrink about 1.6% while T-Mobile has increased its share by about the same amount. Now, the company is turning to inside fixer to turn things around: His name is Sowmyanarayan Sampath.

Sowmyanarayan Sampath Photographer: Michael Nagle/Bloomberg

What you’ll need to know tomorrow

The Best Business Schools in the World

We’ve done it again. Bloomberg has assessed the 110 full-time graduate MBA programs around the globe, using data provided by participating schools as well as responses to survey questions by students, alumni and employers. The surveys gauge the participants’ level of satisfaction with learning, networking, career opportunities, skills development and more. Satisfied? Good. These are the best B-schools.

The Best Business Schools in the World Illustration: Nick Little

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