HSBC reopens plans to cut 35,000 jobs to boost growth

HSBC Holdings Plc began cutting 35,000 jobs, three months after the coronavirus outbreak forced the long-awaited overhaul of its profitability to spark political controversy in its China market.

Deutsche Bank has cut jobs with rivals such as AG and Unicredit Spa. The outbreak of the virus has delayed HSBC's plans to continue its business in Asia, which is a source of much revenue but has added to its support for China's planned Hong Kong security laws.

In a Bloomberg memorandum, Chief Executive Officer Noel Quinn said, "Since February, we have come up with some aspects of our transformation program, but now we have to move forward with others, including our costs, in the long run."

“Against this backdrop, I am writing to let you know that we now need to curb job losses,” Quinn said. "I know this is not welcome news and it creates understandable anxiety and uncertainty, but I want to be open with you about the reality of the current situation."

In February, Quinn unveiled a reorganization, which would cut the global lender's 235,000 employees by 35,000 over the next three years. The lender is targeting a $ 4.5 billion cost reduction in useless units.

Europe and the US are facing cuts as HSBC seeks to diversify its business into areas where it is struggling to make money. The lender's global banking and market business, which forms its corporate advisory and market units, faces significant cuts in sectors such as equity sales and business.

HSBC is focusing on the sales of some of its businesses and is already looking for a buyer for its French retail operations, which disposes several thousand employees out of its payroll.

The reintroduction of the plan was first reported by Reuters.

Most European banks are leaving their old business model with very low interest rates and changing regulations and technology costs. HSBC wishes to concentrate its development in Asia, the US and the UK this month The bank was brought into political line when it publicly ratified China's planned national security law for Hong Kong.

HSBC's main UK-based competitor in Asia, Standard Chartered PLC, has so far pledged to protect jobs during the coronavirus pandemic. The lender has hired a recruiting space because it is focused on protecting the jobs of existing employees.

"Despite the bank's commitment to retaining employees through the epidemic crisis, we believe it is only a matter of time before more cost-cutting plans are announced. In this case, it is vital that we work through the Covids crisis," Cronin, an analyst at Goodbye, wrote in a note.

Post a Comment