Citigroup may slash 10,000 jobs; directors deny move to replace chairman

A day after the Wall Street Journal reported on possible disquiet at Citigroup's top management and a possible concerted move by the bank's directors against chairman Win Bischoff, the paper has reported a massive round of layoffs at the American finance giant. (See: Citigroup in race for Chevy Chase Bank; management shake-up possible)

Starting this week, Citigroup will hand out pink slips to at least 10,000 employees in its investment bank and other divisions throughout the world, the Journal reported, citing people familiar with the matter. Reportedly, CEO Vikram Pandit and his deputies have instructed officials to slash their budgets for employee compensation by at least 25 per cent.

Qquoting spokeswoman Christina Pretto, the Journal said Citigroup continued to work toward its goal of becoming more efficient, including by shrinking its work force. "We will continue to carefully manage our headcount levels as we re-engineer the company in line with our stated goal and market realities," she said.

Citigroup last month announced plans to cut 11,000 jobs in the third quarter, bringing the total number of job cuts in 2008 to 23,000. The goal is to shrink Citigroup's work force to about 290,000 employees by next year, the Journal said.

The paper also reported that Citigroup is notifying some credit card customers that their interest rates are being raised by an average of three percentage points. A person familiar with the strategy estimated that the rate increases would apply to less than 20 per cent of Citigroup's card portfolio, according to the paper.

Meanwhile, Citigroup's board of directors has issued a strong rebuttal to the earlier news that a number of directors, reportedly dissatisfied with the performance of the financial giant, are considering to replace Sir Win Bischoff as chairman. A communication to this effect has been issued to all Citigroup employees globally.

(See: Letter to Citi Employees)