NEW YORK— Citigroup, widely seen as the sickest Wall Street bank, will make some of the most severe cuts in the history of U.S. business — 53,000 jobs — as it tries to slash costs and get back to basics before it's too late.

The cuts, which will leave Citi about 20 percent smaller, are the latest step in a remaking of the American banking landscape since the financial meltdown, an upheaval that has included the demise of storied investment houses and the conversion of others into commercial banks.

Citigroup CEO Vikram Pandit met with employees yesterday and laid out the bank's strategy in stark terms: "We are a bank. What does a bank do? A bank takes deposits and puts them to work by investing and making loans."

Challenger, Gray & Christmas Inc., which has tracked downsizing since 1993, said Citi's cuts are the second-most on record. IBM announced in July it was cutting 60,000 people.

At its peak in 2007, Citi had 375,000 employees.

About half the cuts are expected to come from selling off parts of the business. The bank has already said it would sell Citi Global Services and its German retail banking businesses, and it plans to unload more, a spokesman said. The rest of the cuts are expected to come from layoffs and attrition.

The government invested $25 billion in Citigroup as part of the financial rescue package. Yesterday, the Treasury Department announced it had given another $33.6 billion to 21 banks in a second round of payments from the program.

Still, the Bush administration has told lawmakers it does not plan to use at least half of the $700 billion bailout fund, congressional officials said. That would leave President-elect Barack Obama to decide how to use the money when he takes office in January. The Treasury Department said no decision had been made on whether to spend the rest of the money before Bush leaves office.

For Citi, the simple, leaner plan is a change from earlier in the decade, when banks were making a huge chunk of their profits from complex structured-finance products based on risky debt, like subprime mortgages.

Now those revenues have all but dried up, and Citi is trying to extract itself from exotic debt instruments.

Citigroup, which built up through rapid acquisitions over the past 20 years, has long been criticized as too sprawling and difficult to manage.