IT services cuts are imminent for financial group Citigroup as they look to cut their base cost by up to 20 per cent.

Citigroup has a vast IT services operation, consisting of 23,000 developers, with many functions being duplicated - leading to an increase in expenses, according to a Financial Times report.

One of the first decisions made for the group's IT division is to centralise decisions in New York, amid predictions that global spending on IT services could fall by 4.6 per cent in 2008.

Citigroup chief executive Vikram Pandit said: "It is clearly feasible for us to take 10, 15, 20 per cent off our cost base, especially in information technology and operations."

A report by Pierre Audoin Consultants (PAC) claims that outsourcing of IT services and offshoring are expected to become increasingly common practice for banks in general, because of reduced budgets.

PAC added that because of the credit crunch "banks are very reluctant to take on short-term projects which last two months to two years".

A recent Connect survey found that the two major concerns about outsourcing services like IT support were 'loss of control' (56 per cent) and 'budget over-runs' (43 per cent)