Citigroup Reaches Out to Ex-CEO Reed for Advice

John Reed

As CEO Vikram Pandit continues his massive overhaul of Citigroup's operations, he is reaching out to some unusual help: former Citigroup CEO John Reed.

Reed, who was ousted from the firm about eight years ago by then co-CEO  Sandy Weill, is now consulting with Pandit on how to re shape the massive financial services conglomerate.

Sources tell CNBC that Reed is consulting with Pandit primarily on the consumer banking end of the business—basically how to reshape it and what possible cuts to the business might be made as part of Pandits overhaul of Citi’s operations.

Citigroup Vikram Pandit

As reported, Citi under Pandit is completing a massive revamping of its operations that could lead to job reductions of around 10 percent, or more than 30,000 employees through layoffs, attrition or the shedding of businesses.

It’s unclear how much of this would come out of the retail banking side of the business—much of the red ink being bled at Citi—which including nearly $30 billion in writedowns because of Citi’s bet on risky bonds came from the firm’s investment banking operations.

But with Reed’s help, Pandit thinks there’s fat in the banking end of the business too, according to sources, so that side of the business may be in for cuts as well.

People at Citi say Reed isnt being paid for his work--and because he’s not an officer or one of the biggest shareholder--public records are scant.

When he left Citi he cashed in nearly $300 million worth of stock.

Still this is a huge turnaround for Reed. After he was ousted from Citi. he went into corporate exile and then served as chairman of New York Stock Exchange.

© 2008 CNBC.com