HSBC to axe up to 20,000 jobs: report
03 June 2015
British banking giant HSBC Plc is planning massive job cuts as part of its strategy to reduce costs, according to a Sky News report yesterday.
The bank's chief executive Stuart Gullivar is expected to announce the cuts at an investor meet next week as he seeks to reassure shareholders and investors that the bank's restructuring and drive to cut costs are continuing.
HSBC is under pressure to cut costs and improve its profitability after a 15-per cent fall in net income last year.
Although the exact scale of the job cuts is not known, according to sources, it could be between 10,000 and 20,000 positions.
HSBC, which made a huge 30,000 reduction in its workforce in 2011, has around 266,000 employees worldwide, including 48,000 in the UK.
It is also speculated that British giant may shut down its investment banking division.
HSBC declined to comment on the matter.
It is believed that the anticipated job cuts exclude the effect of potential sale of HSBC's operations in Brazil and Turkey. About a fortnight ago, the lender confirmed the possible sale of its loss-making Brazil unit. (See: HSBC confirms possible sale of Brazil unit)
Sale plans for the Turkish unit, which includes corporate, investment and retail banking, are also under consideration and according to some sources, European banking giants ING and BNP Paribas as well as Bahrain's Arab Banking Corp are likely to be among the bidders for the business.
Late last year, HSBC paid over $600 million in fines to the UK and the US regulators for attempting to rig foreign exchange markets, and it said in February that there could be an additional bill of $1 billion.
The lender is also embroiled in a tax-evasion scandal involving its Swiss subsidiary.
Turning down an appeal, a French court yesterday ordered HSBC to pay €1 billion ($1.1 billion) bond before 20 June, to cover any potential fine that might be decided by any future trial.
HSBC was put under formal investigation in April as its subsidiary was alleged for hiding billions of dollars and helping customers worldwide to evade taxes. (See: French court orders HSBC to pay $1.1-bn over Swiss tax scandal).
Three days ago, HSBC has launched an internal review, along with Barclays and Standard & Chartered to check its anti-money laundering practices, following an FBI investigation on the latest Fifa corruption scandal involving bribes and kickbacks to high-ranking Fifa officials.
Recently, the banking giant has mooted plans to relocate its headquarters out of the UK in the wake of ''regulatory and structural reforms'' following the financial crisis. (See: HSBC mulling moving out of UK).
It is believed that the plan is primarily based on issues including the high bank levy the bank has to pay in the UK and the government's rules to ''ring-fence'' retail operations to protect them from their investment risks.