Layoffs to have "limited" impact on India: Citigroup

"The headcount reduction announced globally will have limited impact in India," the company said in a statement issued in New Delhi. The bank plans to carry out a new restructuring plan where it will let go a total of about 52,000 jobs via attrition, asset sales, and layoffs as it looks to recover from more than $20 billion in net losses over the past year and slash expenses by as much as 20 percent. In the first three quarters of the current year, the bank had axed 23,000 workers.

As of September 30, Citigroup had 352,000 employees worldwide, of which about 22,000 employees are working in India. Last month, Citigroup agreed to sell its Indian back-office unit Citigroup Global Services Ltd (CGSL) to Tata Consultancy Services for $505 million. The transaction is expected to be completed by December. Citigroup Global Services Ltd (formally e-serve) employs 12,000 people.

According to Sanjay Nayar, CEO (South Asia), Citigroup, the bank found it necessary to cut down on "some flab" after five years of substantial growth so that it could survive the global financial meltdown which has already dragged down financial institutions like Lehman Brothers and Merrill Lynch.

However, unlike in the US and in Europe, Citigroup's move would have little impact on India. "India will not be affected by the job-cut decision announced yesterday (Monday). There is a big difference in what is happening in the US and Europe, and in India. There is growth in Indian market," Nayar said, adding that the bank was looking to expand its operations in the country, spurred by demand for credit and need for financial inclusion.

However, "There could be some cuts in Citi's domestic workforce on the back of under-performance," Nayar said.

Earlier this month, Citigroup warned that it would reposition its business in India "to reduce costs and mitigate losses."

The bank's announcement comes close on the heels of India's largest lender, the State Bank of India (SBI) saying it would create 25,000 jobs this year.

Bank of India also said it would add 10,000 employees during the current fiscal despite economic slowdown. In addition, the bank said it would take in 75,000 employees in the next 2-3 years.