HSBC, Europe's biggest bank, will cut some 35,000 jobs
February 18, 2020, 9:28 AM
3 min read
HSBC bank said Tuesday it will shed some 35,000 jobs as part of a deep overhaul to focus on faster-growing markets in Asia and better cope with a slew of global uncertainties.
The interim chief executive, Noel Quinn, said the number of people employed by the bank would fall from 235,000 to 200,000 in the next three years. But he said that some of the reductions would come from attrition as opposed to outright cuts.
Quinn said his team is already carrying out his plans. The restructure involves "consolidating" of some parts of the business and "reorganising the global functions and head office.’’
In August, the company announced 4,700 job cuts from a workforce of 238,000 at the time.
The bank, which is headquartered in London but makes most of its money in Asia, reported that its net profit fell 53% in 2019 to $6 billion.
It said that it plans to revamp its U.S. and European business and shed $100 billion in assets to improve its profitability.
The bank said the virus outbreak that began in China has caused a “significant disruption" for its staff, suppliers and customers, especially in the Chinese mainland and in Hong Kong.
“Depending on how the situation develops, there is the potential for any associated economic slowdown to impact our expected credit losses in Hong Kong and mainland China," the bank said in a statement. “Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains. We continue to monitor the situation closely," it said.
HSBC's revenue rose 5.9% in 2019 to $55.4 billion.
The sharp drop in 2019 profit reflected slower economic activity but also a $7.3 billion write-down for HSBC's Global Banking and Markets and Commercial Banking divisions in Europe. Pretax profit fell 33%, to $13.3 billion. HSBC reported $12.6 billion in net profit in 2018.
HSBC said months' long protests in Hong Kong also weighed on the local economy and caused disruptions to the bank's business.
The bank has been carrying out a corporate overhaul designed to boost profitability by focusing on high-growth markets in Asia while shedding businesses and workers in other countries.
“Our immediate aims are to increase returns, create the capacity to invest in the future, and build a platform for sustainable growth," the bank's group CEO, Noel Quinn, said in the statement.
The bank said it would shrink its sales and trading and equity research in Europe and shift resources to Asia. In the U.S., HSBC plans to grow its international-client corporate banking business.
The restructuring is expected to cost $6 billion, with another $1.2 billion for asset sales, mainly in 2020 and 2021, the bank said.
