HSBC announces massive job cuts
Hong Kong, September 7, 2011
HSBC, Europe's biggest bank, is to cut 3,000 jobs in Hong Kong over the next three years as it targets its first wave of an aggressive cost-cutting plan on five countries.
The bank said on Wednesday the cuts would be made as chief executive Stuart Gulliver aims to cut annual costs by $3.5 billion.
That will involve 30,000 job losses by the end of 2013, Gulliver said last month, though he said 15,000 were likely to be added in Asia and other emerging markets.
The first countries to roll out a new streamlined structure will be Hong Kong, the United States, Brazil, Canada and Mexico.
'We will be focusing primarily on our support functions as we restructure to reduce management layers and improve efficiency,' HSBC Asia-Pacific Chief Executive Peter Wong said in an email to employees seen by Reuters.
'This does mean jobs will be eliminated. Our best estimate at this time is that approximately 3,000 existing roles will be reduced over these three years,' Wong said.
That equates to 10 per cent of the 30,214 staff in Hong Kong at the end of June.
Major banks have axed or announced plans to cut over 70,000 jobs this year as they attempt to slim down after a slowdown in capital markets and tougher regulations has left many looking bloated.
HSBC cut 5,000 jobs in the first half of this year and will shed another 25,000 by the end of 2013 - mostly in Europe and North America - equivalent to a tenth of its 296,000 staff.
Gulliver's restructuring will see HSBC exit or scale back in countries such as Poland, Russia and the United States, where it lacks scale and has been struggling to compete.
He has said the bank's cost base was 'unacceptable'. He wants to get costs to below 52 percent of income, compared with 57.5 percent in the first half of this year.
HSBC added $3.3 billion of costs in 2009/10, with no extra revenue to show for it. 'For all of HSBC's strengths as an organisation, and there are many, we can be needlessly complex and bureaucratic. This complexity reduces our effectiveness and efficiency,' Wong's email said.
The bank said it would have no more than eight layers between the CEO and customer, compared with 14 layers in some countries at present.-Reuters