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Citigroup Names First Talent Chief to Help Address Financial Woes

January 15, 2008
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A struggling Citigroup announced Monday the creation of its first-ever chief talent officer position, and on Tuesday, January 15, chief executive Vikram Pandit told employees worried about possible layoffs because of multibillion-dollar losses from mortgage-related securities that changes at the company are meant to move the business forward.

On Monday, the bank announced that Paul McKinnon, formerly senior vice president for human resources at Dell, would become the company’s first head of talent management. The appointment represents a lesson learned for the company since it fired CEO Charles Prince without having a ready successor and reflects the new priorities of Pandit, who was named CEO in December.

In a memo announcing the position, Pandit wrote: “Attracting, developing and retaining people at the most senior levels of our company is one of my top priorities and requires concentrated attention.”

McKinnon will be responsible for recruiting, developing, reviewing and retaining Citigroup’s senior talent, Pandit wrote in the memo.

Striking an upbeat tone in a global town hall meeting for employees Tuesday, Pandit said the company’s global brand remained solid.

“Our brand is extremely strong around the world,” he said. “We’re a global firm; we have the ability to select from 6 billion people.”

The meeting came just after Citigroup announced a fourth-quarter net loss of $9.83 billion attributable to $22.2 billion in write-downs of securities tied to subprime loans as well as credit costs. Pandit told shareholders and employees that Citigroup would divest from businesses that were not aligned with the company’s long-term strategic goals. He did not specify what those businesses were.

The company also announced a $12.5 billion cash infusion from outside investors.

The company had already designed a major cost-cutting strategy that includes laying off as many as 17,000 employees. Reports Tuesday said the company will announce plans to lay off at least 4,000 more employees.

After speaking with shareholders Tuesday morning, Pandit, who in a statement called the fourth-quarter results “clearly unacceptable,” turned his attention to Citigroup employees. He told workers that the losses were specific to a small number of areas.

“The actions we take today are actions that are designed to separate our past from our future,” Pandit told employees, who reacted to his comments with applause.

In reassuring employees, Pandit said more changes were on the horizon.

“I’m very optimistic about where this will lead us, and when we have more to talk about we’ll get together and talk about it,” he said.

Pandit said he will continue to listen to employees as part of a “listening tour” that will begin next month. McKinnon, meanwhile, will start his new job February 1.

McKinnon comes to Citigroup after 10 years with Dell, where he helped implement the company’s “Wining Culture” initiative. Previously, he worked as an HR consultant and was an assistant professor at the Darden Graduate School of Business at the University of Virginia, where he taught organizational behavior. He is on the board of directors of the HR Policy Association in Washington and was inducted as a fellow into the National Academy of Human Resources in 2002.

John Donnelly, who has worked in human resources at Citigroup for 30 years, will remain head of human resources.

Jeremy Smerd

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