LTI Mindtree shares fall 5% as Citigroup plans to slash external IT contractors to 20% from 50%

LTI Mindtree, Citi

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The shares of IT major LTI Mindtree dropped nearly 5 percent as Citigroup said that it aims to slash its external IT contractors to 20 percent from the current 50 percent. Notably, Citibank is one of the top clients for LTI Mindtree which is set to be significantly impacted if the plan is implemented. The shares of the company were trading at a fresh 52-week low of Rs 4,239 apiece.

Citigroup's head of technology Tim Ryan had informed employees about the plan through an internal presentation seen by Reuters. He, however, didn't mention the timeline in which the group aims to implement the move. The conglomerate aims to hire thousands of employees for its IT services as it plans to reduce its dependence on IT contractors, the report added.

Citi will accordingly hire nearly 2,000 employees this year to have 50,000 employees in technology, the report said. "Citi is growing our internal technology capabilities to support our strategy to improve safety and soundness, enable revenue growth and drive efficiencies," Citi told Reuters.

Moneycontrol couldn't independently verify the report.

Notably, New York-headquartered Citi Group planning to reduce external dependence and increase its internal resources comes as US President Donald Trump continues to promote the 'America First' policy and impose harsh tariffs on imports.

LTI Mindtree shares hit a fresh 52-week low of Rs 4,239 apiece on March 17. The stock had last traded at such low levels in April 2023. The stock is currently the top loser on the Nifty IT index, which itself was down 0.59 percent to hover around 35,908.

Wipro, which also has some exposure to Citi Group, meanwhile dropped over 1 percent to trade at Rs 260.50 per share.

In other news, LTIMindtree recently appointed its former COO Nachiket Deshpande as the president of its newly formed AI services business group. This is part of CEO designate Venu Lambu’s ongoing senior management changes. Earlier, Deshpande was one of the front runners for the CEO position to succeed incumbent CEO Debashis Chatterjee. Lambu was announced as the CEO designate in January.