UPDATE: July 7, 2020: HSBC is looking to cut 255, or 38%, of the 678 positions in its French banking and markets unit by the end of next year, Reuters reported Tuesday.
The move is meant to “reallocate capital and resources to overcome the structural challenges in this business, to focus on profitable activities, reduce the cost base and thus safeguard our competitiveness,” HSBC said in an emailed statement seen by the wire service.
Britain’s largest lender last month resumed its effort to shed 35,000 jobs by 2022, after putting the plan on hold for three months at the height of the coronavirus pandemic.
The bank also aims to double its number of mobile users in that time frame — an initiative meant to move its simplest transactions out of branches, thus justifying the need for fewer branch employees, Bloomberg reported in late June.
HSBC kicked off a sale of its French retail arm in January, contradicting comments a union representative made to Reuters four months earlier. The bank sent an overview of the business to potential buyers, including French banks Credit Agricole, BNP Paribas and private-equity firms Apollo Global Management and Cerberus Capital Management, sources told Bloomberg.
- HSBC has resumed its initiative, announced in February, to cut up to 35,000 jobs by 2022 and slash annual costs by $4.5 billion, CEO Noel Quinn said Wednesday in a memo to employees.
- "The reality is that the measures and the change we announced in February are even more necessary today," Quinn said, according to the Financial Times. "We could not pause the job losses indefinitely — it was always a question of 'not if, but when.'"
- The bulk of the job cuts are likely in the global banking and markets unit, which houses investment banking and trading, a senior executive familiar with the plans told Reuters.
The bank decided to "pause, for the time being, the vast majority of redundancies" in March "because of the extraordinary impact of the Covid-19 pandemic," Quinn said in a previous memo. Quinn added in April, concurrent with the bank’s annual general meeting, that he would proceed with the plan "wherever possible."
HSBC also will maintain a freeze on almost all external hiring, Quinn said Wednesday, adding that he expects most employees will remain in their jobs or paid through the end of the year but did not wish to "over-promise."
The bank expects natural attrition of up to 25,000 roles each year, but redeploying all affected staff members would be unrealistic, the senior executive told Reuters.
HSBC’s French retail arm is up for sale. The bank said said in February that it would cut assets in its U.S. arm's investment banking and markets by almost half and close about 70 of its 229 branches, according to The Wall Street Journal.
The bank is also ensnared in a tense debate as its support for China's planned Hong Kong security law has made waves in its key market.
Unite, a workers' union representing some of the bank’s U.K. staff, said the news would cause "great apprehension" among employees. "The question that must be asked today is 'Why now, HSBC?'" said Dominic Hook, national officer at the union, according to Bloomberg.
Shares in HSBC have fallen 27% since the start of March, according to Reuters.