Abu Dhabi, UAETuesday 24 November 2020

HSBC to cull 10,000 jobs as it looks to rein in costs

Interim chief Noel Quinn seeks immediate savings to boost growth

HSBC is planning to cut thousands of jobs as the company looks to rein in costs to boost growth. Bloomberg
HSBC is planning to cut thousands of jobs as the company looks to rein in costs to boost growth. Bloomberg

HSBC is planning to cut 10,000 jobs to rein in costs and boost growth, the Financial Times reported on Monday.

The largest lender in Europe by assets, may announce its latest cost-cutting drive when it reports third-quarter results later this month, with layoffs targeting high-paid roles, the newspaper said. HSBC employs 238,000 people throughout its network in Asia, the Middle East, Africa and the Americas.

Interim chief executive of the bank, Noel Quinn, is working on a plan with Ewen Stevenson, HSBC's chief financial officer, who substantially lowered costs when he held the same role at Royal Bank of Scotland, according to FT, which cited people familiar with the matter.

Mr Quinn was appointed as the interim chief executive in August following the exit of his predecessor John Flint, who was dismissed in part because he avoided “difficult decisions” on job cuts, the FT reported cited one of the people as saying.

Mr Quinn and Mr Stevenson are said to be trying to find savings in each of the bank’s four major divisions, which service multinational corporations, smaller businesses, retail customers and wealthy people.

“We’ve known for years that we need to do something about our cost base, the largest component of which is people — now we are finally grasping the nettle,” said one of the people quoted by the newspaper. “There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”

HSBC recently announced 4,700 job cuts as part of a scheme known as “Project Oak”, which tried to encourage executives and managers to shrink their teams by offering funding from a central pot of money to cover redundancy payouts.

The latest reduction in headcount comes amid slowdown in the global economy due to trade tensions, Brexit uncertainty as well as negative or low interest rates that are impacting revenues of banks.

In August, Germany's Deutsche Bank said it would eliminate 18,000 roles as part of a radical overhaul. Barclays, Societe Generale and Citigroup have also announced layoffs this year.

HSBC did not immediately comment on how many positions it may cut in the Middle East when contacted by The National.

HSBC shares were down 0.75 per cent in early trading.

"The cut to nearly 0.4 per cent of the workforce is HSBC acknowledging the problems it faces from a slowing economy in China, unrest in Hong Kong and lower interest rates across the US and Europe," wrote Jasper Lawler, head of research at London Capital Group.

"The shares could react more favourably once the job cuts are formerly announced, though this could depend on the timing. Given the shake up at the top, reports of job losses- it might be fair to assume some difficult quarterly results."

Updated: October 9, 2019 10:20 AM

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