SHORTLY after 2am last Monday morning, Citigroup bankers began to hear their Blackberrys chirp. Vikram Pandit, the bank’s recently installed chief executive, had just sent an e-mail to every employee in the company.

Headed “Our culture”, the memo praised the “remarkable efforts” from staff and the 200 years of history that ensured Citi would continue to be the “backbone of world commerce”. Citi would become “the greatest turnaround story of our age”, Pandit promised. “We can make this the best company in the world, bar none.”

Within hours, the message had made its way onto the internet. No sooner was it posted than bloggers on both sides of the Atlantic had branded Pandit “delusional”. Many of the critics claimed to be part of Citi’s 350,000-strong global workforce.

Pandit certainly has his work cut out selling his message. Over the next few days he will begin signing off second-quarter results that are expected to reveal further write-downs of at least $8 billion (£4 billion). That would be in addition to the $40 billion of write-downs the bank has already announced since the sub-prime crisis erupted last summer.

Although Citi has raised more than $50 billion in new capital to repair its balance sheet, analysts believe it will need even more new cash to see it through the financial crisis.

With at least 18,000 jobs destined to be axed before the year is out, the mailing list for Pandit’s feel-good memos gets shorter by the day.

“There are still a lot of people protecting old empires inside Citi,” said one former Citi executive, who left the bank recently. “Vikram has made it clear he’s not going to stand for that.”

In Citi’s equities division, traders are expecting news of sweeping job cuts imminently, though an unexpectedly strong performance last month may have kept the number of casualties down, according to sources close to the bank.

Pandit’s regime, however, is all about making things smaller.

Under the acquisition-led direction of Sandy Weill, Citi became the world’s biggest bank. During the reign of his successor, Chuck Prince, Citi became one of the biggest victims of the credit crunch, through its huge exposure to the complex credit products that began to blow up last year.

Now Citi is also beginning to suffer from rising bad debts in its American credit-card business.

Prince fell on his sword in November before the full extent of Citi’s woes had become clear. He is the only casualty from the bank’s board — so far.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts