India-First-Global-Insights-Analysis -Sharing-PlatformIndia-First-Global-Insights-Analysis -Sharing-Platform

HSBC announces massive global downsizing

, June 9, 2015, 0 Comments

hsbc global downsizing marketexpress-inBanking giant HSBC is to cut at least 10 percent of its global workforce as part of a cost-cutting drive aimed at saving $5 billion annually by the end of 2017. The bank also wants to boost investment in Asia.

British banking behemoth HSBC said on Tuesday it would reduce its headcount by between 22,000 and 25,000 as part of restructuring efforts – or about 10 percent of its global workforce. Between 7,000 and 8,000 of those jobs will be cut in the UK.

The company said it would largely close down its operations in Brazil and Turkey, which will reduce staffing levels by another 25,000. Instead, the bank wants to expand in China and ASEAN countries.

HSBC has already reduced staffing levels from 295,000 in 2010 to 258,000 at the end of 2014. Under the latest plans, total headcount will go down to between 208,000 and 211,000.

It also plans to set up what it calls a “ring-fenced British bank,” which will be based in Birmingham, central England.

The bank said it would aim to cut costs by between $4.5 billion and $5 billion (3.9 billion euros and 4.4 billion euros) annually by the end of 2017.

“HSBC is now undertaking a significant reshaping of its business portfolio,” the bank, which this year marks its 150th anniversary, said.

“It is redeploying resources to capture expected future growth opportunities and adapting to structural changes in the operating climate,” it added.

Asia investment

Part of the restructuring at HSBC is a review of where to locate its headquarters by the end of this year. Earlier this year, the bank said it may move its head office out of London.

The bank also plans to step up its investment in Asia, by developing its business in the Pearl River Delta in Guangdong province, China, and in the ASEAN region.

“The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade,” chief executive Stuart Gulliver said. In outlining the group’s actions to investors and analysts, Gulliver said: “We recognize that the world has changed and we need to change with it.”

The news comes just a week after the bank agreed to a massive fine to settle in a money-laundering probe in Switzerland – one of various scandals HSBC has been embroiled in.

Source: Deutsche Welle |
Image Credits: HSBC Media Resources