The International Monetary Fund faces the biggest internal shake-up in its history. The new managing director, Dominique Strauss-Kahn, has announced plans to cut up to 15 per cent of the organisation's staff to try to stabilise the fund's finances as demand for its loans continues to evaporate.
Theywill be the first round of redundancies since the IMF's foundation in 1949. Dominique Strauss-Kahn will axe 300 to 400 jobs out of more than 2600. Compulsory redundancies are likely, he said.
The fund is facing a deficit of US$400 million ($517 million) a year by 2010.
The IMF was set up to assist countries experiencing difficulties under a regime of fixed exchange rates, at a time when private capital markets were less well developed.
The IMF's critics have suggested it is increasingly out of touch.
The fund's governance has also come under attack for being dominated by the US and Western Europe to the virtual exclusion of developing economies.
Strauss-Kahn said the cuts were part of his strategy to win backing for a plan under which the IMF would sell its gold and invest the proceeds to generate income.
"All this is possible only if I have the commitment by different governments," he said.
