UK-based multinational banking, investment and financial services provider HSBC initiates its previously announced job cuts in the London branch. According to the updates released by the firm so far, the year ahead will see a reduction of total headcount in the firm by nearly 4% which in simple terms would translate to nearly 10000 jobs.
HSBC’s job cuts is the second such major drive from a tier 1 bank in the European market with first such occurrence seen in Germany’s Deutsche Bank as banking and financial services providers begin succumbing to impact of a slowdown in global economic activity and growth influenced by ongoing geopolitical events and trade wars. While the banking service provider is going ahead with job reduction of full-time executives on quite a large scale, the firm has not formally announced or hinted at any restructuring plans and cost-cutting measures to shield itself from cues influenced by geopolitical events.
While the updates hint at a sizable reduction in headcount of employees, it hasn’t announced details such as exact headcount and plans on how many phases exactly would these job cuts be performed. But rumours in the market suggest that the firm is expected to reveal its exact plans in detailed reports when the firm releases its earnings reports later this month. This move comes shortly after the changes made to its top-level leadership role alongside the resignation of its Chief Executive Officer John Flint.
While the move is being pursued with an increased seriousness and harshness at the moment, the decision for massive job cut drive was made quite a while back and made public earlier this year. The move was made public when it initiated cost-cutting measures aimed at protecting its dividends by laying off senior-level executives. While the CEO’s resignation from the firm is touted as a decision made mutually, no clear reason for the decision was made public and given the firm’s disappointing financial reports lately, it is widely believed to have influenced the board to move forward with a decision to change the leadership role.
Following Flint’s resignation, the role of Chief Executive Officer has been taken up by Noel Quinn– the CEO of HSBC’s global commercial banking division in the interim period until a suitable replacement is found. Yet another notable lay off that garnered lot of attention was – Nick Bruce – the former global head of business development at HSBC Securities Services division, given his long tenure at the firm. The firm has been under increasing pressure for more than a year now given the miss in revenue and cost targets by a huge margin.
However, the recent changes made in the firm’s top-level management saw several key roles being filled by highly experienced veterans with a successful track record in a bid to help improve business and make revenue grow faster than costs. The firm aims to achieve this by shifting its focus from the investment sector to corporate and retail banking which is a major source of revenue and contributes to great part of the firm’s business operations given its widespread presence in Asian markets.