HSBC to slash 35,000 jobs in strategy overhaul
HONG KONG, Feb 18: HSBC Holdings PLC said on Tuesday it would shed $100 billion in assets, shrink its investment bank and revamp its US and European businesses in a drastic overhaul that will mean 35,000 jobs cut over three years.
The bank, which has struggled to keep pace with leaner and more focused rivals, is seeking to become more competitive as it grapples with slowing growth in its major markets, the coronavirus epidemic, Britain's European Union exit and lower central bank interest rates.
In the latest in a series of overhauls since the 2008 financial crisis, HSBC said it would merge its private banking and wealth businesses, axe European stock trading and cut US retail branches as it seeks to remove $4.5 billion in costs.
"The totality of this program is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years," Noel Quinn, interim chief executive, told Reuters.
The restructuring, one of the largest undertaken by a blue chip lender for more than a decade, will be partly managed through natural attrition as people leave the bank, he said.
The UK-based bank, whose huge Asian operations are headquartered in Hong Kong, said the coronavirus epidemic had significantly impacted staff and customers. In the long run it could reduce revenue and cause bad loans to rise as supply chains are disrupted, Quinn said.
The virus has killed almost 1,900 people, overwhelmingly in mainland China, and infected more than 70,000, while its economic impact is spreading across the globe.
HSBC veteran Quinn is auditioning for the permanent role of CEO, which the bank said in August would be announced within six to 12 months.
"In one sense, they are doing the things that were obvious and had been called out by many, so it's good," Hugh Young, managing director at Aberdeen Asset Managemement Asia, one of HSBC's 20 largest investors said.
"Getting this done will require a fair amount of work, then we need to see how it settles down. Noel is doing a good job in very difficult circumstances," he added. -Reuters