Banking giant HSBC to shed 35,000 jobs

The boss of HSBC has announced the bank's biggest change in years, as it prepares to cut its headcount by approximately 35,000 around the world, including jobs in the UK.

Tuesday, 18th February 2020, 12:45 pm
Updated Tuesday, 18th February 2020, 12:53 pm
HSBC

Interim chief executive Noel Quinn said the number of people employed by the lender will go from 235,000 to 200,000 over the next three years - reducing the bank's workforce by 15 per cent.

Finance chief Ewen Stevenson said there will be "meaningful" cuts in the UK where the bank employs around 40,000 people.

Dominic Hook, from the Unite union, said he is "seeking urgent discussions" with HSBC management to understand what it will mean for UK staff.

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"Despite HSBC still making billions of dollars of profit, once again hard-working and dedicated staff have woken up to the news that their job could be at risk," he added.

The bank did not give a breakdown of where job losses are expected, and it added that 25,000 people leave the business every year of their own accord. Smart hiring around these departures could allow HSBC to cut figures without firing too many people, bosses stressed.

The move comes as HSBC plans to slash more than 100 billion US dollars (£77 billion) from its risk-weighted assets. Banks must hold capital against assets, such as loans, based on their riskiness, so that they can take the blow if the asset is lost.

HSBC reported a 33% fall in pre-tax profit for 2019 to 13.35 billion dollars (£10.2 billion) - below analysts' expectations.

The bank said the drop was due to "a goodwill impairment" of 7.3 billion dollars (£5.6 billion).

"This arose from an update to long-term economic growth assumptions, which impacted a number of our businesses," HSBC's annual results statement said.

Shares fell by as much as 5.9% to 555.9p on Tuesday morning.

The company warned that the outbreak of coronavirus had caused "significant disruption" for its business, especially in mainland China and Hong Kong.

Its headquarters are in London but almost half of its revenue and nearly 90% of profit came from Asia in 2018, with much of that derived from Hong Kong.

HSBC said coronavirus might push down lending and transactions in the region, which could reduce its revenue. It lowered its outlook for the overall Asian economy in 2020, mainly in the first quarter of the year.

Mr Quinn said: "The group's 2019 performance was resilient; however, parts of our business are not delivering acceptable returns."

The bank said it is still looking for a full-time boss to replace Mr Quinn, and hopes to do so within the next six to 12 months.

The HSBC statement also addressed Brexit, saying: "Now that the UK has officially left the EU, negotiations can begin on their future relationship.

"This has provided some certainty, but no trade negotiation is ever straightforward. It is essential that the eventual agreement protects and fosters the many benefits that financial services provide to both the UK and the EU."

It added that, as well as remaining close to Europe, the UK must also strengthen its links with other key partners, including the US, China and south-east Asia.

Mr Quinn said he and his team had begun implementing a plan to "increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth".

The restructure involves "consolidating" of some parts of the business and "reorganising the global functions and head office".

Last August the company announced 4,700 job cuts from its then workforce of 238,000.