The IMF was in the process of scaling down its staff as it thought that with the robust activity in the private markets there was no need for their existence. This is true. See media report below:
IMF to cut staff by 15%
7 December 2007
Washington, DC
In an exclusive interview with the Wall Street Journal, Dominique Strauss-Kahn, the new Managing Director of the International Monetary Fund (IMF), reveals plans for significant layoffs at the institution, by as many as 300-400 jobs.
As part of his efforts to revive its relevancy and increase income, Dominique Strauss-Kahn, the new Managing Director of the International Monetary Fund (IMF) plans to cut IMF staff by as much as 15% -- the first significant round of layoffs since the institution was founded in 1945.
In an exclusive interview with the Wall Street Journal, Strauss-Kahn noted that the cuts would depend on his getting approval from member governments for his plans to increase income.
The IMF faces annual loan deficits of $400 million by 2010, according to the article. The IMF currently employs 2,634 staff. By cutting 300-400 positions, Strauss-Kahn would reduce the deficit by $100 million. In addition, the new Managing Director hopes to realize cost savings by reducing the bureaucracy in the institution and cutting the number of economists it employs.
"This institution works well, with dedicated people and very high-level staff, but it is a factory to produce paper," Strauss-Kahn said in the interview.
Strauss-Kahn hopes that the U.S. and other large shareholders will increase IMF's income in exchange for the proposed savings. He also plans to sell 400 metric tons of IMF's gold stock and invest institutional reserves in "higher-yielding instruments."
Though Strauss-Kahn says he wouldn't go ahead with the cuts without approval for his plans to boost income, the article notes that IMF members are "likely to force him to go through with the job cuts anyway."
Sources
IMF Plans to Cut Jobs, Lift Income, by Bob Davis, December 7, 2007. (Wall Street Journal website)
Strauss-Kahn Seeks to Quickly Refocus IMF, IMF Survey Magazing, December 7, 2007. (IMF website)
