HSBC set to cut thousands of jobs worldwide: report

A man walks past a logo of HSBC outside a branch at the financial Central district in Hong Kong, China June 2, 2015. REUTERS/Bobby Yip

LONDON / HONG KONG: HSBC Holdings Plc could announce thousands of job cuts at a strategy day next week, Sky News reported Monday, part of chief executive Stuart Gulliver’s overhaul of Europe’s biggest bank.

The plan could also see Gulliver sell operations in Brazil and Turkey and take a knife to HSBC’s investment bank.

An estimated 10,000 to 20,000 jobs will be axed, Sky News said, citing unidentified sources. The number has not yet been finalized and Gulliver will lay out the plans at an investor presentation on June 9, the broadcaster said.

HSBC declined to comment on the Sky report.

It was unclear how many of those cuts would come from moves already announced by the lender.

Gulliver was appointed CEO in 2011 and has axed more than 50,000 jobs at the bank as part of a restructuring. However, he has come under pressure from shareholders to do more to revive the bank’s flagging fortunes.

Jim Antos, analyst at Mizuho Securities Asia, told Reuters TV that more job cuts may not be enough to appease investors.

“The share price has been dead for several years now. What the market is looking for is something pretty substantial like a new strategy, a new theme,” he said in an interview with Reuters TV in Hong Kong Tuesday.

“They’ve had tens of thousands of job cuts already and it’s not been the answer so far. It’s repeating the same pattern,” Antos said.

HSBC’s shares were up 0.1 percent in London at 0805 GMT.

Low interest rates and tougher regulations have hurt HSBC more than most banks in recent years, meaning Gulliver has missed some of his profit and cost targets.

In response, he has sold or exited 77 business units since he took the helm. In February, he said businesses in Turkey, Brazil, Mexico and the United States needed to improve, or be sold.

HSBC is now looking to sell the Brazil business and Gulliver is expected to confirm on June 9 its loss-making Turkey business is also on the block. Substantial overhauls to HSBC’s U.S. and Mexico businesses are also on the cards, banking sources have told Reuters.

Sky said the job cuts to be announced on June 9 will not include the impact of any sale of the bank’s Brazil and Turkey businesses.

Less certain are Gulliver’s plans for global banking and markets (GBM), the investment banking division he ran for four years before becoming chief executive and which contributes a third of the bank’s overall profits.

Several investors and analysts say HSBC has been slower than rivals to restructure its investment bank and Gulliver needs to cut its rates and credit business. Profits at the GBM division fell by $1.1 billion in 2014 from a year earlier amid tougher market conditions for investment banks.

Gulliver is also expected to provide more details next week on whether HSBC should move its headquarters from London. If the bank moves it would most likely be to Hong Kong, where it was based before moving to London in 1993.

A version of this article appeared in the print edition of The Daily Star on June 03, 2015, on page 6.




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