HSBC To Cut 10,000 Jobs Internationally As Low Interest Rates Bite

HSBC is set to undergo a major international overhaul that could see up to 10,000 jobs cut as the bank seeks to slash expenses. With HSBC currently employing around 238,000 staff, the cuts, which would be on top of off the 4700 redundancies already announced earlier this year, would represent a substantial reduction and one of the most wide-ranging cost cutting exercises at the bank in years.

The drive will be overseen by Noel Quinn, the man recently appointed as HSBC’s ‘interim’ CEO after predecessor John Flint resigned following just 16 months in the job. Quinn was previously CEO of HSBC’s global commercial banking division and is said to be interested in taking the job permanently.  He will hope that being the man to take and see through the hard decision to let so many employees go will strengthen his position but it is believed that even if someone else is brought in as permanent CEO, Quinn will continue in his role as part of the group’s board of directors. The decision to end Mr Flint’s tenure was rumoured in large part to be a result of his perceived unwillingness to ‘take the hard decisions’.

Mr Quinn’s right hand man in executing the swinging cuts to expenses, which will be made across all four of the bank’s major divisions (multinational corporations, smaller businesses, retail customers and wealthy individuals) will be HSBC’s chief financial officer Ewen Stevenson. Mr Stevenson managed a similar process in his previous role at RBS.

HSBC are believed to be prioritising a retrenchment in its Asian heartland where it is more profitable than in Europe in particular. The “increasingly complex and challenging global environment” of rock bottom interest rates, trade wars and Brexit. An insider is quoted in the Financial Times as commenting:

“We’ve known for years that we need to do something about our cost base, the largest component of which is people — now we are finally grasping the nettle. There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”

It is believed, HSBC itself has made no official statement on the reports and is expected to announce the strategy alongside its Q3 results, that redundancies will focus on highly paid positions that will have the greatest impact on overheads. And the bank is far from alone. A stream of competitors have already having announced, or are believed to be in the process of planning, cuts. In August Deutsche Bank announced the cull of 18,000 positions and Barclays, Société Générale and Citigroup have also this year announced major redundancies.