The Economy is Sooooo Great – HSBC Preparing Job Cuts That May Target 20,000 Workers, Sky Says
by David Sheer, Bloomberg HSBC Holdings Plc, Europe’s largest bank, will announce a plan next week to cut thousands of jobs, Sky News reported, citing unidentified people close to the matter. Chief Executive Officer Stuart Gulliver will disclose a target when he updates shareholders on the bank’s strategy on June 9, laying out a reduction that will probably affect 10,000 to 20,000 people, according to Sky. The number is still being worked out, it cited one person as saying. Heidi Ashley, a spokeswoman for HSBC in London, declined to comment on the report. The company employed almost 258,000 people at the end of last year. Gulliver, 56, is striving to reduce costs and sell businesses to bolster earnings, while spending billions of dollars to boost internal compliance. The job-cutting target will exclude the potential impact of selling businesses in Brazil and Turkey, as well as the possible separation of HSBC’s U.K. arm to meet a requirement to separate the consumer and investment banking businesses, Sky said. The bank also is threatening to leave the U.K. over tax increases and the introduction of some of the toughest regulations in the world. Last year the British levy imposed on the firm’s global balance sheets cost HSBC 750 million pounds ($1.1 billion), the most among U.K. lenders. It’s vital HSBC set a clear target for reducing expenses so that it can improve returns to shareholders, who’ve seen insufficient evidence of progress, James Chappell, an analyst at Berenberg Bank, wrote in a note to clients last month. Revenue growth is unlikely in a low interest rate environment where companies have taken on too much debt, he said.