HSBC job cuts to reach 50,000 with Turkey, Brazil sell-off

HONG KONG - Agence France-Presse

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Scandal-hit bank HSBC said on June 9 it would cut its global headcount by up to 50,000 as part of a restructuring that entails its withdrawal from Brazil and Turkey, while it also mulls abandoning London as its HQ.

In a statement to the Hong Kong stock exchange it also said it intends to save $5 billion in annual costs within two years.

The announcement comes ahead of an investor update later on June 9 in which chief executive Stuart Gulliver is expected to announce thousands of job losses.

“HSBC is now undertaking a significant reshaping of its business portfolio,” the bank, which this year marks its 150th anniversary, said.

“It is redeploying resources to capture expected future growth opportunities and adapting to structural changes in the operating climate,” it added.

The statement did not mention extensive job cuts, the details of which were buried in an investor update report.     

That report said there would be a 10 percent reduction in jobs, with between 22,000 and 25,000 classified under “transformation savings”, including streamlining IT projects. A further 25,000 jobs would be lost with the selling of operations in Turkey and Brazil.

The move is the latest in a series of swingeing cuts under Gulliver, who joined at the beginning of 2011.

Staff numbers have dropped from 295,000 in 2010 and by 2017 there will be 208,000 remaining.

The statement also said it will aim to save $4.5-$5 billion in annual costs by 2017 but would continue to serve large corporate clients in Brazil “with respect to their international needs”.    

The bank added that it would focus more on Asia, particularly the in the Pearl River Delta, and set up a ring-fenced British bank.

It also expects to complete a review of where to locate its headquarters by the end of this year.

Gulliver has said the lender may relocate due to increased British regulation and taxation of the banking sector. Financial analyst Jackson Wong described the announcement as a “decisive move”.

“It’s a big cut...(but) they haven’t been able to save costs over the past few years,” Wong, associate director for Simsen Financial Group, told AFP.

He added that the bank was likely to relocate its headquarters to Hong Kong, owing to its low tax regime. “The chance is pretty high for Hong Kong,” he said.