Company News: Citigroup, Delta Air Lines, Microsoft, Netflix, Tescoby
Citigroup: New CEO wields the ax
Michael Corbat, Citigroup’s new chief executive officer, is eliminating more than 11,000 jobs, scaling back operations in some emerging markets and taking a $1 billion charge this quarter. The global consumer-banking business will absorb more than half the job cuts, particularly units in Pakistan, Paraguay, Romania, Turkey, and Uruguay. The institutional clients group, which includes trading, investment banking, and transaction services, will shed about 1,900 jobs. Some of the areas targeted are those that predecessor Vikram Pandit had prioritized for cuts. The latest layoffs amount to about 4.2 percent of Citigroup’s workforce.
Delta Air Lines: Mulling a British tie-up
Delta Air Lines is considering a stake in Virgin Atlantic Airways, a move that would position the U.S. carrier to compete for more business and first-class passengers. Talks are under way for Delta to acquire all or part of Singapore Airlines’ 49 percent in Virgin Atlantic, two people familiar with the matter said. An ownership stake would give the No. 2 carrier in the U.S. something it has long coveted: greater access to London’s Heathrow Airport, which is closer to the city than Delta’s current base at Gatwick Airport.
Microsoft: A tablet slog
A push by Microsoft and Intel to challenge Apple’s dominance of the $63.2 billion tablet market is off to a slow start. The companies had said PC makers would offer about a dozen tablets that run on the Windows operating system by late October. Instead, only five tablets are now available. And customers will have to wait until January to get the first generation of Microsoft’s own Surface tablets that run the new Windows 8 Pro software on Intel’s chips. That device will start at $899, about the same price as Apple’s 11-inch MacBook Air.
Netflix: A Disney lifeline in 2016
Netflix will offer Walt Disney live-action and animated films starting in 2016, marking the first time a major studio will bypass cable TV to release films on a Web-based streaming service first. Disney’s current agreement with Liberty Media’s cable channel Starz Entertainment expires in 2015. The new multiyear deal includes films by Pixar Animation Studios, Marvel Entertainment, and Disney. It’s a coup for Netflix, which faces emerging competition in online video and pressure to sell the company from activist investor Carl Icahn.
Tesco: Exiting the U.S.
The U.K.’s largest grocer said it may exit the U.S. after announcing that it’s conducting a strategic review of its unprofitable Fresh & Easy unit. All options, including a sale, closure, or partnership, are being considered for the 199-store U.S. chain. Tesco built the business from scratch, starting in 2007. The plan was to target urban areas on the West Coast, where big-box supermarkets dominated, with a series of neighborhood stores that stocked budget-priced healthy food, including predominantly private-label items.