For two years, Bill Johnson and his team at the retail partner cards division of Citigroup worked under a cloud of uncertainty. First came months of worry over how their parent company would survive the financial crisis. Then, after a restructuring relegated the group to orphan status-it got shoved, together with the firm's other unwanted or distressed assets, into a new entity called Citi Holdings-it was time to worry about their own survival.

As CEO of the division, Johnson tried to reassure employees that being lumped into Citi Holdings had less to do with the retail partner cards business itself, which co-brands cards with retailers such as Macy's, Sears and Home Depot, and more to do with Citi's circumstances and the state of the financial markets. Over and over he tried to communicate the idea "of the business being a valuable business, and that the work they were doing was valuable," he recalled.

Johnson didn't want employees distracted from the task at hand. He still needed his front-office staff engaged with the group's retail partners, and he still had to run operating centers employing thousands of workers around the country. But he agreed with the philosophy of Mike Corbat, who was then overseeing Citi Holdings, that there was no need to whitewash the situation for anyone.

"Employees deserve the intellectual and moral honesty of telling them their business may be sold," said Corbat, who in November was named Citi's CEO for Europe, the Middle East and Africa after overseeing the divestiture of more than 40 businesses and $500 billion in assets that had been sitting in Citi Holdings. "Reinforcing that [employees] can best position themselves by making their business attractive to a buyer who may bring over the employee base as part of an acquisition was critical."

According to Mel Fugate, an associate professor of management and organization at Southern Methodist University's Cox School of Business, there has never been a study to determine just how many hours of productivity a company can expect to lose when it puts itself on the block, announces impending layoffs or otherwise does something bound to cause major anxiety for employees. But Fugate is certain that the potential drain on the partner cards group and other parts of Citi Holdings would have been well above average.

"Citi was in such dire circumstances. That urgency would make all the anxiety go way up. What would make it worse is that it was, and still is, a horrible job environment. Trying to manage people who have all that uncertainty about their future? This would have been a manager's nightmare, and productivity absolutely would have been cut."

And all the while he was contending with fearful employees and orchestrating efforts to shore up the struggling division, Johnson also was working on potential deals to help Citi dispose of the unit.

Which must have made it all the more satisfying that Friday in October when Johnson got the call from Corbat saying that retail partner cards would be staying with Citigroup. The Atlanta-based business, which had shed a third of its people and reorganized itself around a group of assets deemed core to the business, had been sprung from its holding pen and invited back into the fold by Citi's senior executives in New York.

In the months since, the retail partner cards group has churned out a flurry of news. It has renewed or extended contracts with nearly all of its major partners, it reached an agreement to provide customer financing for parts and service through 3,000 Ford dealerships across the country, and it reshaped the management team led by Johnson, with two big promotions from within and two outside hires from GE and HSBC. The business also got rechristened in January. It is now called Citi Retail Services.

As part of the group's restructuring, it made major investments in analytics and in digital and mobile capabilities that could help merchants identify customer patterns, trends and needs.

The new name "has more to do with repositioning ourselves and having people think about us in that broader context," Johnson says. "But there certainly is that side benefit of having a new start and a separation from the name 'Retail Partner Cards Group' and what that might have meant over the past two or three years."

For other managers trying to cope with the upheaval that has defined the financial services industry of late, Johnson offers a bit of insight. "Our best learnings were around communicating, and really appreciating people's circumstances and what uncertainty does in terms of creating worry," he said. "The best we could do was to try to take the uncertainty about the things we didn't know about, put it all in a box, put the box over to the side, and try not to visit it too often."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.