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HSBC Cuts 10,000 Jobs to Curb Its Expenses

HSBC Holdings Plc, a UK-based multinational banking and financial services holding company, has plans to downsize its staff and cut 10,000 high-paid jobs, which makes up over 4% of the company’s manpower. Such a decision has been motivated by the intention of Noel Quinn, provisional CEO of HSBC, to reduce costs the whole banking group is incurring.

HSBC did not provide any comments. As Financial Times has reported on Sunday, job slashing will address those whose positions are high-paid. An official announcement from HSBC will be probably made later in October when the company is to make a report on its third-quarter results.

Over the last years, HSBC has been dealing with large costs. In 2011, the bank appointed Stuart Gulliver as its CEO, and he announced plans to cut 30,000 jobs, which could help curb about $3.5 billion in expenses over three years and increase the company’s return on equity to 12-15%.

In 2015, HSBC was going to cut a total of 25,000 jobs globally, which was about 10% of HSBC’s workers, including 8,000 employees in the UK.

In June 2019, the largest European bank had 237,685 full-time employees. In August, HSBC welcomed Noel Quinn as a new CEO. The leave of the former executive John Flint was a big surprise, but the bank explained that they needed a serious change to address ‘a challenging global environment’. Later, it turned out that Flint’s view was at odds with the vision of chairman Mark Tucker, they disagreed over many issues, including the choice of approach to reduce costs.

This year, Noel Quinn supported by Mark Tucker is planning to lay off 4,000 people, which is the most ambitious endeavor to reduce costs over the last years. Any job cuts will be implemented in addition to the terminations announced earlier.

Analysts at Citigroup Inc. commented:

“HSBC has a structural profitability challenge in the Americas and Europe and headcount reduction may be appropriate.”

Besides, HSBC, currently the 7th largest bank in the world, has quite dismal prospects as a result of some economic and political issues, such as a trade war between the United States and China, an easing monetary policy cycle, unrest in its key Hong Kong market and Brexit.

However, the banking giant is struggling to retain its leadership and expand. Its plan to downsize and cut costs will not disturb HSBC from intention to employ more than 600 people for its wealth business in Asia by the end of 2022, with more than half of those jobs to be added through this year. At the moment, HSBC is especially interested in growing its business in China, and last month, HSBC launched a public-relations campaign aimed at leaders in Beijing.

Other European banks, such as Deutsche Bank AG, Societe Generale SA and Barclays Plc are also cutting thousands of jobs, as low-interest rates and a slowing economy weigh on their prospects. In July, Deutsche Bank AG announced plans to restructure the organization and cut 18,000 jobs. At that time, the bank made a lot of noise on social media because of this decision. Besides, the interest to its activity was heightened by an occasional picture of two men walking next to a Deutsche Bank with tote “Bitcoin” bags in their hands. But as it turned out, the men were representatives of a tailoring company related to cryptos.

HSBC Cuts 10,000 Jobs to Curb Its Expenses

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