The labor union of Citibank Korea is to stage a strike from Wednesday as a last-ditch effort to protest the management’s imminent restructuring plan.

The U.S.-based bank plans to downsize its business here by 30 percent, which will result in the elimination of 56 operating branches and the layoff of hundreds of employees.

In a vote held last Wednesday, 91.6 percent of 3,200 union members agreed to stage a phased walkout, blaming the management for failing to give out the due notice on restructuring.

The 11th-hour negotiation held Friday under the mediation of the National Labor Relations Commission also ended without compromise.

The strike is to be the second for Citibank, after a months-long walkout in 2004 when Citigroup took over KorAm Bank to gain a foothold in the Korean market.

The protesters’ first phase will involve the rejection of using English during working hours, an action expected to seriously hinder the operation of the foreign-based bank.

This partial demonstration will then expand to the refusal to attract new customers, to a relay strike and then to an all-out general strike, according to officials.

Despite the discord, the bank’s management stresses that the restructuring is inevitable to improve falling profits.

Citibank Korea’s return on equity rate plummeted from 10.46 percent in 2008 to the lowest-ever 1.33 percent last year. The bank shuttered 100 branches during the same period.

This business downtrend boosted speculations that the bank may back out of the money-losing retail finance sector or leave the Korean market altogether within years, but management shrugged off the rumors.

“We have no plans to quit any of the key businesses in Korea,” said Stephen Bird, CEO of Citibank Asia-Pacific, in an email to employees.

But the reduction of the number of branches is crucial as the bank’s profits are no longer dependent on physical infrastructure but rather on digital networks and special functions, he added.

By Bae Hyun-jung (tellme@heraldcorp.com)