IMF cost cuts spur over 500 redundancies

IMF cost cuts spur over 500 redundancies

By Chris Bryant and Krishna Guha in Washington

Published: April 30 2008 00:08 | Last updated: April 30 2008 00:08

Almost 500 International Monetary Fund staff are set to leave after 20 per cent of the fund’s workforce requested voluntary redundancy as part of a plan to deliver $100m in cost savings.

The announcement was made as the IMF disclosed that member countries almost unanimously approved a new voting system to give emerging and developing economies greater influence. The fund originally sought 380 voluntary redundancies, mainly in senior management and administrative roles, but its buyout offer was heavily oversubscribed, drawing 591 applications from 2,900 eligible staff.

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IMF faces glut of staff seeking buyouts as reform advances

12 hours ago

WASHINGTON (AFP) — The International Monetary Fund said Tuesday it has a glut of employees seeking buyout packages as its member nations overwhelmingly approved major voting and quota reforms.

The IMF said it had received requests from 591 of the 2,900 eligible employees for redundancy packages that were offered in a cost-cutting restructuring aimed at shoring up its shaky finances.

That represented roughly one in five employees, about half more than targeted.

The IMF had targeted 380 job cuts in a bid to trim operating expenses 13.5 percent over the next three years.

Managing director Dominique Strauss-Kahn told AFP that higher-than-expected demand for buyouts reflects the attractiveness of the buyout packages and early retirements.

The IMF management offered buyouts equivalent to about a year and a half of salary, a source close to the fund said.

Strauss-Kahn welcomed the demand for exits from the 185-nation IMF.

"The good news is that avoids any phase of outright layoffs and provides room to hire those with new qualifications," he said.

The high number of buyout volunteers, who had until March 21 to submit their requests, will allow the IMF to "substantially" increase the initial target of 380 job cuts, he said, without disclosing a specific figure.

The IMF said in a statement that from the total of 591 buyout volunteers, between 100 to 125 from the middle level of the organization will not be approved for the packages.

The proportion of voluntary separations sought by senior staff and support staff will allow the IMF "to achieve the needed rebalancing in its structure."

However, the number of mid-level economists volunteering to go was higher than anticipated, IMF spokesman Masood Ahmed said.

Strauss-Kahn said the additional staff departures will allow the IMF to begin hiring "in September" financial markets specialists as part of a strategy to build the institution's strengths in that field.

As part of the restructuring, the IMF said six of its department heads had decided to leave.

Departing will be Mark Allen, director of the Policy Development and Review Department; Shailendra Anjaria, the IMF secretary; David Burton, director of the Asia and Pacific Department; Bert Keuppens, director of the Office of Internal Audit; Mohsin Khan, director of the Middle East and Central Asia Department; and Michael Kuhn, director of the Finance Department.

Earlier, the IMF said that member nations overwhelmingly approved vote and quota reform measures that strengthen the role of developing and emerging market countries.

The reform measures were approved Monday by 175 of the 185 IMF member nations, representing 92.98 percent of the total fund voting power, well ahead of the minimum 85 percent required for approval.

The reform, criticized as inadequate by a number of analysts, calls for developed countries to give up a small fraction of their voting rights -- equivalent to 1.6 percentage points -- to the benefit of emerging and developing countries.

The reallocation of voting power, which is supposed to occur every five years, extends more weight to countries experiencing strong economic growth, such as China, India, Brazil, South Korea and Mexico.

The main losers in the reshuffling are Britain, followed by France, Saudi Arabia, Canada and Russia.

The reform measures ultimately depend on member nations' legislatures to take effect.