- HSBC Perfects Plan to Cut 35,000 Jobs Amid Restructuring
The Hongkong and Shanghai Banking Corporation (HSBC), one of the world’s largest financial institutions, has perfected plans to cut 35,000 jobs globally in the next three years in an effort to restructure its operations and focus resources on Middle East and Asia.
Noel Quinn, interim Chief Executive Officer, HSBC, explained that in order for the bank to turn around its poor performance of 2019, its total workforce has to reduce from 235,000 to 200,000.
The lender’s profit dropped by 33 percent in 2019 to $13.3 billion, while total revenue grew by 4 percent with operating costs rising by 22 percent during the year.
“The group’s 2019 performance was resilient, however, parts of our business are not delivering acceptable returns, We are taking decisive action today in order to address those under-performing parts of the business, to redistribute capital to growth opportunities, to simplify our business – and in so doing reduce the cost base of HSBC,” Quinn said.
Also, HSBC will reduce its assets by $100 billion, cut investment bank and close one third of its US branches to focus resources on the Middle East and Asia where it made the most profit in recent years.
The restructuring is projected to cost $7.2 billion by 2020.
“We expect the reduction [in assets] to be fully offset by growth opportunities we see elsewhere,” CFO Ewan Stevenson disclosed during a phone call with reporters, explaining the organisation plans to shift capital from Europe and the United States to Asia and Middle East.
“This represents one of the deepest restructuring and simplification programs in the bank’s history,” Quinn stated.