Citigroup's Job Cuts Could Total More Than 30,000

Citigroup's job cuts could reach 30,000 or more over the next year and a half because of increasing writedowns from subprime-related debt, CNBC has learned.

Mark Lennihan / AP

The layoffs would exceed the previously reported 24,000 job cuts that had been expected at the banking giant.

Chief Executive Vikram S. Pandit is currently conducting a massive cost review and could cut as much as 10 percent of the bank's workforce of 370,000, according to people familiar with the situation.

In the past, Citigroup  would lay off people  and then hire them back as consultants. But with more bad-debt writedowns looming, Pandit wants to make the cuts permanent, sources say.

"They are asking managers if you have a task that takes six people, implement a plan where it only takes four people to complete," said one manager.

The cuts are expected to occur over the next 12-18 months.

Citigroup posted a fourth-quarter loss of $9.83 billion, its first loss since the bank was created in 1998 from the merger of Citicorp and Weill's Travelers Group.

The loss stemmed largely from $18.1 billion of write-downs and related expenses for exposure to subprime mortgages, plus a $5.41 billion increase in credit costs, including a $3.85 billion charge to boost reserves.

Many analysts think Citigroup will have to write down more subprime debt in the coming weeks.

Meanwhile, the head of Gulf investment agency Dubai International Capital said that Citigroup may need "a lot more money" from outside investors, Reuters reported.

However, unnamed people familiar with the mater later told The Wall Street Journal that Citigroup executives are confident with the company's capital levels and aren't looking to raise additional funds from outside investors.

Citigroup in January slashed its dividend 41 percent, and has since November raised some $30 billion of capital from investors including Abu Dhabi, Kuwait and Saudi Prince Alwaleed bin Talal.

But Sameer al-Ansari, chief executive of the investment agency owned by Dubai's ruler, said more would be necessary.

"It's going to take more than that to rescue Citi," al-Ansari said at a private equity conference. Dubai International Capital manages about $13 billion of assets, and has invested in HSBC Holdings and India's ICICI Bank.

Separately, Merrill Lynch analyst Guy Moszkowzki was said to have forecast a first-quarter loss at Citigroup of $1.66 per share, after $15 billion of mortgage-related write-downs.

--Reuters contributed to this report

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