10,000 jobs on the line amid HSBC challengesTop News | Agencies and Stella Zhai 8 Oct 2019
HSBC may eliminate as many as 10,000 jobs as part of a cost-cutting drive as interim chief executive Noel Quinn seeks to make his mark, reports said, quoting people familiar with the matter.
The lender, one of several European banks shrinking its workforce, is questioning why it has so many people in the region when it has double-digit returns in parts of Asia, the Financial Times reported.
The cuts, affecting about 4 percent of its global workforce of roughly 238,000, come as Quinn ramps up an cost-cutting strategy started under predecessor John Flint - who abruptly departed in August after 18 months leading the bank - failed to radically cut expenses.
"HSBC has a structural profitability challenge in the Americas and Europe and the headcount reduction may be appropriate," said analysts at Citigroup, highlighting Quinn's sharper focus on profitability.
The job cuts - on top of 4,700 redundancies flagged earlier - could be unveiled when HSBC reports its third-quarter results later this month, reports said.
Quinn started working on the new plan days after he was appointed and has been told he is a leading internal candidate for the permanent role.
European banks have been cutting thousands of jobs as low-interest rates and a slowing economy weigh on their prospects. Deutsche Bank in August said it would reduce 18,000 roles, while Barclays and Societe Generale have also announced job cuts this year.
HSBC has remained committed to its expansion in Asia, even with the Sino-US trade war and Hong Kong's protests.
The bank said last month it is sticking with plans to hire more than 600 for its wealth business in Asia by the end of 2022, with more than half of those jobs to be added through this year.
The plan reportedly would not prevent the bank from continuing to hire "revenue-generating" staff in high-growth regions in Asia, where it generated nearly 80 percent of its profits in the first half of the year. Chief financial officer Ewen Stevenson has said the bank's returns from Europe were "unacceptable," while in the United States, the bank said it would miss the return target it had set for next year.
Quinn and Stevenson are trying to find savings in each of the bank's four major divisions, which service multinational corporations, smaller businesses, retail customers and wealthy individuals.
Shares of the company in the London Stock Exchange once dropped by over 1.1 percent to 5.95 (HK$57.62) on Monday, 1.1 percent lower compared with the closing price of HK$58.25 on the Hong Kong stock market on Friday.