HSBC will slash 35,000 jobs
HSBC will cut 35,000 jobs as part of a global overhaul over the next three years.
Danica Kirka and Elaine Kurtenbach had the news for the AP:
HSBC will shed some 35,000 jobs as part of a deep overhaul to focus on faster-growing markets in Asia and as it tries to cope with a slew of global uncertainties, from Brexit to the trade wars to the new coronavirus.
The interim chief executive, Noel Quinn, said Tuesday the number of people employed by the bank would fall from 235,000 to 200,000 in the next three years. Some of the reductions would come from attrition as opposed to outright cuts.
HSBC, which is based in London but does most of its business in Asia, is caught among myriad uncertainties. From Brexit uncertainties to the Hong Kong protests and trade disputes between the United States and China. Now the new coronavirus is adding further uncertainty.
The bank’s net profit fell 53% to $6 billion in 2019 and, for this year, it warned of “significant disruption″ to its business due to the outbreak of the virus in China.
HSBC’s operations in Europe are also under pressure. It must now also grapple with Britain’s departure from the European Union and the uncertainty that will accompany negotiations future trade relations.
“No trade negotiation is ever straightforward,″ HSBC said in a statement. “It is essential that the eventual agreement protects and fosters the many benefits that financial services provide to both the U.K. and the EU.”
The BBC reported:
HSBC, which makes the bulk of its revenue in Asia, reported annual profit before tax of $13.35bn (£10.3bn).
It said the fall in profits was mainly due to $7.3bn in write-offs related to its investment and commercial banking operations in Europe.
The 35,000 job losses are deeper than expected, and represent about 15% of the workforce. Analysts had expected about 10,000 jobs to be cut.
The bank currently operates in more than 50 countries across North America, Europe, the Middle East and Asia. It employs more than 40,000 people in the UK, where it has its headquarters.
About 10,000 of those are based at its head office in Canary Wharf in London, and another 2,000 work at its new UK head office in Birmingham.
HSBC has said some of the cutbacks will be in its European and US investment banking businesses, although it has not been specific about where the job cuts will fall.
Yen Nee Lee from CNBC wrote:
In a statement accompanying the earnings release, Quinn said the $7.3 billion goodwill impairment in Europe “arose from an update to long-term economic growth assumptions, which impacted a number of our businesses,” and from the “planned reshaping” of the bank’s global banking and markets business.
The write-down resulted in a pre-tax loss of $4.65 billion in the bank’s European business.
In terms of HSBC’s business in Asia, where the bank derives the bulk of its earnings, Quinn warned of pressure from the ongoing coronavirus outbreak.
“Since the start of January, the coronavirus outbreak has created significant disruption for our staff, suppliers and customers, particularly in mainland China and Hong Kong,” he said.
“Depending on how the situation develops, there is the potential for any associated economic slowdown to impact our expected credit losses in Hong Kong and mainland China,” he added. “Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains.”