IoT
Strategic CIO // IT Strategy
News
12/31/2008
01:02 PM
50%
50%

Citi Inks Sale Of Offshore Services Unit

Citigroup Global Services is sold to TCS for $512 million.

Troubled financial services company Citigroup on Thursday said it completed the $512 million sale of its offshore business services unit to India's Tata Consultancy Services.

As a result of selling off Citigroup Global Services, Citi, which is looking to cut costs, will reduce its head count by 12,000 employees. Some of those workers will transfer to TCS. Citigroup Global Services provides offshore customer support and other back-office services for Citi's worldwide operations.

Citigroup, one of the U.S. banks hardest hit by the global credit squeeze, is selling off piece parts in an effort to shift the bulk of its focus onto core banking operations.

Earlier this month, Citi said it had reached an agreement with Indian IT outsourcing company Wipro Technologies under which Wipro would acquire Citi's tech services unit for $127 million. As part of the deal, Wipro will provide a range of IT services to Citi for six years for at least $500 million.

An undisclosed number of employees of India-based Citi Technology Services, as the bank's IT services arm is formally known, will join Wipro.

The deals signal Citi's plan to rely more heavily on offshore services in an effort to reduce operating expenses. Indian programmers and call center workers are generally paid less than half of what their American counterparts earn.

Also in December, Citi announced completion of the sale of Citibank Privatkunden AG & Co. KGaA, its German retail banking operation, and a number of affiliates to French bank Credit Mutuel-CIC, for about $6.6 billion. In its most recent quarter, Citi reported a net loss of $2.8 billion, or 60 cents per share.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of July 24, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.