Citi may announce layoffs

NEW YORK (Reuters) - Citigroup (C.N) is likely to announce on Tuesday a significant dividend cut, at least $10 billion (5.1 billion pounds) of new capital and a writedown of as much of $20 billion, the Wall Street Journal reported on Monday.

The largest U.S. bank is also likely to announce more than 20,000 job cuts when it posts fourth-quarter results on Tuesday, the Journal reported, as new Chief Executive Vikram Pandit tries to cut costs.

"You have a new person at the helm. He's going to do what he can to clear the decks," said Ralph Cole, portfolio manager at Ferguson Wellman Capital Management in Portland, Oregon.

The new capital is expected to come from sources including the Government Investment Corp (GIC) of Singapore, the Kuwait Investment Authority, and Saudi Prince Alwaleed bin Talal, already one of the largest Citi shareholders, the Journal reported, citing people familiar with the plans.

Jennifer Lewis, head of communications at GIC, declined to comment. "We can only comment on transactions that have been done or announced," she said.

Citigroup is struggling with a widening subprime mortgage crisis that has forced it to write down billions of dollars of assets and pushed its capital ratios below target levels.

It is expected to report a fourth-quarter loss, its first since Sanford "Sandy" Weill put the financial conglomerate together in 1998.

But a dividend decrease would represent an about-face for Citi, which said in a November 4 statement it had "no plans to reduce its current dividend level."

Analysts, most notably Meredith Whitney of CIBC World Markets, have been forecasting a Citi dividend cut for several months. Cutting the 54-cent-a-share quarterly dividend in half would save Citigroup more than $5 billion a year.