HSBC Holdings on Tuesday said that it will slash 35,000 jobs over the next three years as part of a major overhaul of its businesses. HSBC said that in a major shake-up it will shed $100 billion in assets by end of 2022, slash its investment bank and revamp its US and European business. The bank also it warned that the outbreak of coronavirus could impact its performance in 2020 in Asia.
HSBC has been struggling for quite some time to keep pace with its competitors and has been suffering in major markets owing to a number of reasons including the recent coronavirus outbreak UK's exit from the European Union. This is not the first time HSBC has announced a major shake-up. The company has been overhauling its operations since 2008.
A major step
HSBC's interim chief executive, Noel Quinn, on Tuesday said that it plans to cut $4.5 billion in costs, which would end up in the company slashing almost 15% of its global workforce. "We would expect our headcount to decrease from the current level of 235,000 to be closer to 200,000 in 2022," he said. The bank also said that it would be merging all its private banking and wealth businesses. It will also stop trading at Europe and axe US retail branches.
HSBC said that there would be "meaningful" cuts in jobs in UK, which will be primarily restricted to its head offices, and global banks and market businesses, which are mostly based in London. This definitely is a big move and the bank is likely to face resistance form worker unions. In fact, union official have already called for talks with HSBC on the planned job cuts.
The bigger picture
HSBC has operations in 64 countries and has been suffering in many markets owing to multiple reasons that also include the recent coronavirus outbreak and Britain's exit from the European Union. This is HSBC's latest in a series of overhauls that started in 2008.
However, this is one of the largest restructuring undertaken by HSBC in more than a decade. The UK job cuts, however, are part of a wider restructuring plan across its European operations. HSBC plans to slash 25% jobs in the UK. That said, per Tuesday's announcement, HSBC will now be going on a massive job cut in its US divisions, where it will be closing almost a third of its 224 branches. The bank also issued a warning that the deadly coronavirus outbreak could impact its performance in 2020.