Citigroup is preparing for more surgery as it reports another big quarterly loss and additional write-downs as a result of the credit crunch.

On a conference call today, the bank says that it will be cutting an additional 9,000 jobs.

Citi has already been cutting jobs—more than 4,000 announced earlier this year—reorganizing businesses and selling some units, like Diners Club.

Vikram Pandit, the chief executive of Citi, said that there will be more changes to come. "As we move into the second quarter and beyond, we will continue to divest nonstrategic assets and allocate capital to the products and regions that will drive increased revenues, enhance the value of our franchise, and ultimately, maximize shareholder value," he said.

In an interview with the Financial Times, Pandit indicated that deep job cuts are coming.

"It is clearly feasible for us to take 10, 15, 20 percent off our cost base, especially in information technology and operations," Pandit told the paper.  

That would mean tens of thousands of jobs lost worldwide.

Wall Street would take the brunt of it. The financial industry has already been busy retrenching. Lehman Brothers is reducing its workforce by 5 percent, and Morgan Stanley is cutting several thousand jobs. And perhaps as many as two thirds of Bear Stearns' 14,000 employees will lose their jobs when J.P. Morgan Chase completes its takeover of the firm.

When there is a freeze on Wall Street jobs, the New York economy—and real estate, art sales, and luxury goods—certainly feel a chill.

Although Wall Street accounts for just 5 percent of the jobs in New York, it provides nearly a quarter of all wages in the city.

With Citigroup, Pandit is trying to prune a sprawling global giant that was created a decade ago by the merger of Citicorp and Sandy Weill's Travelers. As Jesse Eisinger detailed in Condé Nast Portfolio, the bank has staggered under its own weight, suffering from high costs, a lack of coordination among operations, and underinvestment in technology and businesses.

Since taking over in December, Pandit has been reviewing the bank's operations and has already moved to cut back its holdings of leveraged loans and its mortgage exposure. The bank has raised more than $30 billion in capital and has cut its dividend.

The write-downs for the first quarter was not as bad as some estimates, and the loss was smaller than the $10 billion hit in the fourth quarter of 2007.
 
Still, Citigroup's quarter was a complete reversal of a year ago. It reported a loss of $5.1 billion, or $1.02 per share, compared with a profit of $5 billion, or $1.01 per share, in the quarter a year earlier. The loss was wider than analysts' estimates. Revenue slumped 48 percent, to $13.22 billion.

The bank took $12.1 billion in write-downs: $6 billion on investments related to subprime mortgages, $3.1 billion on leveraged loans, $1.5 on its exposure to bond insurers, and $1.5 billion on its inventory of auction-rate securities. Citi is also accounting for an increase of $3.1 billion in credit costs tied to consumer lending.

"This is the quarter they get to clear the decks," Arthur Hogan, chief market analyst at Jefferies & Co., told Reuters. "Vikram Pandit is coming in and making pretty big changes, and that's what he gets to do. It's a cathartic quarter."