IMF

IMF staff scramble for buyouts amid reforms

4 min

The IMF said 591 employees had applied for redundancy packages offered as part of a cost-cutting plan aimed at shoring up its shaky finances, after member nations backed reforms designed to implement a more balanced voting system.

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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 the 380 job cuts targeted 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, which is struggling with a budget shortfall and widely criticized as irrelevant.

"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.

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," it said.

However, the number of mid-level economists volunteering to leave 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 strenghth's 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.

"IMF is losing relevance within its own member countries and at the same time is losing appeal with its own staff," said Domenico Lombardi, president of the Oxford Institute for Economic Policy and a former IMF and World Bank adviser.

In a phone interview, Lombardi cited low morale in the largely expatriate staff and the dollar's weakness, which has undermined the competitiveness of IMF salaries, especially for Europeans.

Asked whether the high demand for redundancy packages could further demoralize staff, he said: "Absolutely, no question."

Many senior positions will be closed, thus limiting career opportunities, he explained.

Earlier, the IMF said that 175 of its 185 member nations approved vote and quota reform measures that strengthen the role of developing and emerging market countries.

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

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