U.S. companies cut back pinching pennies

By Scott Malone - Analysis

BOSTON (Reuters) - With the U.S. economy stumbling and credit harder to find, corporate America is pinching every penny it can -- from asking employees to cut back on copying documents to dropping education benefit programs.

Industries from financial services to airlines to automakers have cut tens of thousands of jobs this year as they struggle to return to profitability in the face of the sharpest economic slowdown in years. Concerns that the downturn could linger into next year has many top companies' managements digging around to save even more money.

Citigroup Inc, the largest U.S. bank, has cut 14,000 jobs so far this year as it reels from $58 billion in write-downs and credit losses. Now it is has started looking for more mundane ways to cut costs.

In a memo to the bank's institutional clients group dated August 15, the group's head, John Havens, asked employees to cut back their spending on everything from client entertainment to new BlackBerrys and ordered them to stop using colour copies for internal presentations.

"colour presentations are unnecessary for internal purposes; therefore going forward colour copying and printing should only be used for client presentations," Havens said in the memo. "Over time, we will be removing colour copiers and printers from the locations where they are not essential for purposes of preparing client presentations."

Citigroup declined to comment further.

U.S. coffee shop chain Starbucks, which in July reported its first quarterly loss as a public company, has told U.S. executives at the vice president rank and higher that they will receive no raises next year, while lower-ranking workers will receive 2 percent or 3.5 percent pay hikes.

No. 3 U.S. automaker Chrysler LLC, controlled by private equity firm Cerberus Capital Management LP, in July suspended a program under which it helped non-union employees pay for college classes, as part of an effort to cut the cost of its white-collar staff. Larger rival Ford Motor has mothballed a similar program.