Nearly 85 per cent of the 9,500 jobs that Citigroup says it will move to low-cost destinations may come to India.

Citigroup Inc yesterday announced its decision to slash 17,000 jobs, largely in the consumer finance and investment banking business. Sources close to the developments indicate that 8,000 of these could be shifted to India. The move will enable Citigroup to cut costs by $3.7 billion in the next year.

The remaining 1,500 jobs are likely to be passed on to Philippines, Russia and Poland. South Asian markets like Malaysia and Vietnam are also emerging destinations for service sector BPOs.

During his India visit last month, Chuck Prince, chief executive officer, Citigroup, had indicated that he would review the company's five divisions to create a "leaner, thinner" Citigroup.

The announcement has made the Indian business process outsourcing (BPO) industry the focus of global attention, with considerable speculation on how Citogroup plans to deploy the additional numbers.

Industry watchers and analysts, who requested anonymity, say the company would prefer to grow organically and increase the headcount at its Indian BPO, Citigroup Global Services (formerly known as eServe).

At present, Citigroup has a workforce of around 20,000 in India, with close to half working for its BPO operations that serve Citigroup interests across various geographies. The BPO operations are located in Chennai, Mumbai and Delhi.

"India is the most sought-after destination for BPO operations for many service-oriented companies. Low cost of labour and real estate compared to the West, a developed legal system, and a large English-speaking population give India a clear advantage over the developed world," said a banking analyst.

However, a senior analyst feels Citigroup might also look at an acquisition, rather than outsourcing work to Indian BPOs. "Even if it does transfer work to Indian BPOs, it will be for a transition period of a year or so. It will surely want to add these numbers at its existing centre or acquire another company that will give it the volumes," said an analyst.

Currently, the company's anytime money (ATM) operations have been outsourced to Euronet. Some of the names being floated include Hewlett Packard and Genpact, which have a sound financial and accounting services portfolio.