Citi may effect larger job cuts in India

The deteriorating financial conditions of Citigroup may now hit its Indian operation harder.

The deteriorating financial conditions of Citigroup on the international front may now hit its Indian operation harder than expected in terms of rationalisation of its employees.

According to the sources, the bank may be getting ready to take a tough call to lay off some of the officials whose size will be much larger now ranging from the junior levels to senior levels. Sources further added that the bank was also preparing severance packages for its employees who will be axed soon.

However, the bank rubbished such rumors. “Currently, we aren’t doing anything on the domestic front. These are just exaggerated reports. We have already said that the job cuts which was announced last week will have ‘limited’ impact on India,” bank’s spokesperson added.

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Talking about a possible takeover or merger with Citi, the spokesperson said,” No comments.” Last week, Sanjay Nayar, former CEO for India and South Asia, Citibank, was replaced by Mark Robinson, who took over as the new India head. Nayar moved over to Kohlberg, Kravis, Roberts & Co, joining as the chief executive officer and India head.

The ‘New York Times’ reported on Saturday that a ‘series of tense meetings and telephone calls’ took place among Citigroup executives over several ‘options’ that included replacing CEO Vikram Pandit, or sell all or part of the company.

Quoting ‘people involved in the talks,’ the newspaper reported that the other options included a public endorsement from the government or a new financial lifeline. A board meeting took place on Friday morning, after which several calls were made by some board members to treasury secretary Henry Paulson and Timothy Geithner, president of Federal Reserve Bank of New York, tipped as the new treasury secretary under President-elect Obama, the ‘New York Times’ reported.

The management took radical action on Monday to cushion the blows of the financial turmoil and revive its flagging share price, announcing plans to axe 52,000 jobs, or one in seven employees, and slash costs by about $10 billion (£6.6billion).

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The moves, unveiled by chief executive Vikram Pandit in a meeting with staff, are a dramatic escalation of Citi’s efforts to deal with a crisis that has forced it to record a loss in each of the past four quarters.

The company’s poor performance and continued slide in its shares have raised the pressure on Pandit amid simmering internal disagreements and a boardroom revolt over Citi’s failure to buy Wachovia, a US regional lender.