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Citigroup Global Services (CGSL) has put the sale of its BPO operations on hold. CGSL is the India outsourcing operation of Citigroup which also has similar interests in China, Philippines, Latin America and Europe. The group which had started the sale process sometime back was close to finalizing the deal with Genpact in late 2007, but differences over the terms of the contracts and the price the deal could not go through. It now wants to relook at all the operations and has put the sale of the Indian operations on hold.

Citigroup was reported last year that Genpact had emerged as the buyer for Citi’s BPO business, Citigroup Global Services. Accordingly Citigroup and Genpact were close to coming to an agreement. But differences over the term of contracts and the price could not be resolved and the market crash has ensured a major fall in valuations of most major BPO firms. At $700 million, the deal suddenly looked expensive for Genpact. CGSL handles multiple operations for Citigroup entities globally, including retail banking operations like credit cards, mortgages, personal loans and the like. It has operations in Mumbai, Chennai and Gurgaon, too. It has some 11,000-12,000 employees, of which half service the international operations of the group. It caters to operations in more than 40 countries. Citigroup is present in over 100 countries internationally.

Citigroup has a separate knowledge in outsourcing processing activities for corporate and investment banking clients. It also has a technology outsourcing, Citi Technology Services. Citigroup had recently said it was writing down $22.2 billion. It posted a $9.83 billion loss for the fourth quarter as against a profit of $5.1 billion in the previous year. For the full year, Citigroup net income dropped to $3.62 billion as against a profit of $21.53 billion in 2006. With the fall in profits, the group is likely to take a hard look at its expenses and would be looking at going in for an aggressive job cut. Currently, it has already announced 4,200 job cuts. The move is likely to help low-cost operations of the group like India and Latin America.

Vikram Pandit is the new CEO of Citigroup and he is in the midst of undertaking wide-ranging changes at the firm to cut losses it had suffered due to subprime crisis. It might include some job cuts or change over workforce. Besides the Indian outsourcing business, Citigroup also has outsourcing operations in overseas and has to relook at all these operations globally and looking to these operations it has put the sale process on hold.