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HSBC to slash 50,000 jobs globally to reduce costs

In a significant restructuring exercise, HSBC will axe close to 50,000 jobs globally, bowing to immense cost-cutting pressures and meeting the stringent new regulatory policies coming into force after the 2008 financial crisis.

hsbc

This is the second big overhaul for the bank since the 2008 crisis and is part of a major revamp announced by the CEO Stuart T. Gulliver, who took charge in 2011.

The bank is planning to divest its operations in Turkey and Brazil, though it plans to maintain a presence in Brazil to serve large corporate clients.

According to a statement released by the bank, HSBC will pull down its assets by approximately $290bn on a risk adjusted basis (RWA) and will implement annual cost-saving initiatives of $4.5-5bn by 2017.

As HSBC generates more than half of its earnings from Asia, the bank will increase its investments in the region and plans to develop its business in both the Pearl River Delta in Guangdong province, China, and in the ASEAN region.

Gulliver said: "HSBC has an unrivalled global position: access to high growth markets; a diversified universal banking model with strong funding and a low risk profile; and strong internal capital generation with industry leading dividends. We recognise that the world has changed and we need to change with it.

"The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade. I am confident that our actions will allow us to capture expected future growth opportunities and deliver further value to shareholders."

The New York Times writes that the bank is also contemplating relocation of corporate headquarters to Hong Kong from London, and is expected to complete the review process by the end of the year.

HSBC has exited scores of underperforming businesses earlier to cut costs.


Image: HSBC plans to increase its investment in Asia. Photo: courtesy of Danesman1.