Troubled Citigroup Sells IT Services Arm To India's Wipro - InformationWeek
IT Leadership // IT Strategy
11:09 AM
[Cybersecurity] New Methods for Managing the Skills Shortage
Jun 06, 2017
In this webinar, security experts discuss methods for doing better security with fewer people, inc ...Read More>>

Troubled Citigroup Sells IT Services Arm To India's Wipro

The $127 million deal includes a six-year outsourcing contract under which Wipro will provide tech support to the bank.

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

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

"This transaction is consistent with our efforts to improve our operating leverage while we focus on our core banking competencies," Citi chief administrative officer Don Callahan said in a statement.

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

Citi executives hinted that the deal signals a plan to rely more heavily on offshore services in an effort to cut costs. Indian programmers are generally paid less than half of what their American counterparts earn.

"This partnership enables Citi to leverage Wipro's expertise in information technology services where we have significant plans for driving higher efficiencies by leveraging the global delivery model," said Citi CTO Marty Lippert.

In October, Citi reached a deal to sell its business services unit, Citigroup Global Services, to India's Tata Consultancy Services for $505 million. The unit provides call center operations management and other services to Citi's worldwide operations.

The pact includes an arrangement for TCS to provide business services to Citi for 10 years for $2.5 billion.

Earlier this month, 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. Citigroup shares were off 1.63% to $6.64 in late-morning trading Tuesday.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of Data and Analytics
Today's companies are differentiating themselves using data analytics, but the journey requires adjustments to people, processes, technology, and culture. 
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of November 6, 2016. We'll be talking with the 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.
Flash Poll