Citigroup shares are down more than 4% this afternoon after CNBC reported that massive layoffs could be on the horizon for the suffering finance giant. The network warned that, although the expected 45,000 layoffs are the result of mortgage-related losses, the job cuts will not be confined to the company's fixed-income and mortgage divisions. This round of layoffs would be the second for Citigroup this year; in April, the firm announced the elimination of 17,000 jobs as a cost-cutting measure.

Citigroup responded to the CNBC report with a delicately worded statement via spokeswoman Christina Pretto, who said, We are engaged in a planning process in anticipation of our new CEO, and our business heads are planning ways in which we can be more efficient and cost effective to position our businesses in line with economic realities. Pretto also asserted that any reports on specific numbers (of layoffs) are not factual. And, about that new CEO? A 4-person panel has reportedly come up with a short list of candidates, but it's unclear when a final decision will be made as to who can replace the deposed Charles Prince, whose departure heralded the beginning of this latest bout of cost-efficiency.

While the shares of Citigroup extend their months-old decline, option traders remain stubbornly optimistic. The Schaeffer's put/call open interest ratio of 0.74 ranks lower than 56% of other such readings taken during the past year a middling ratio that's hardly commensurate with Citigroup's seemingly unequaled woes. On the other hand, short sellers are beginning to catch on: Short interest on Citigroup jumped 38% higher during the most recent reporting period.