Banks are terminating their workers across the globe due to revenue declines across the sector. Lowered interest rates, threats of trade wars and political uncertainty at global level have all been the key players in eroding balance sheets of several banks, alongside interest rate cuts which would further reduce margins.
The latest instance of this trend came to light when HSBC Holdings plc, a renowned multinational investment bank and financial services holding firm headquartered in London, UK, is set to axe approximately 10,000 jobs under its latest cost cutting drive. This step would lead to a substantial reduction in the banking firm’s overall head count of about 2,38,000 employees.
As per sources knowledgeable of the matter, the layoff plan of the company represents its most ambitious attempt to control its cost in several years. Reportedly, the company has known since years that it needs to do something about its cost base, whose largest component is people, and now the company is finally grabbing the nettle.
Reliable sources cite, the company is conducting some hard modelling, searching why the firm has so many working in Europe when it is getting double-digit returns from various parts of the Asian continent.
The job cuts, announced on top of the 4,700 job redundancies announced earlier, is expected to be unveiled when the company reports its third quarter outcomes later in October. HSBC announced the 4,700 redundancies over what it called an increasingly challenging and complex global environment that is characterized by low rates of interest, Brexit uncertainty and trade conflicts.
HSBC recently unveiled a public-relations offensive focused at the leaders at Beijing since it is worried about its top position as the largest foreign bank throughout China. The bank also stated that this campaign demonstrates its commitment to develop its business in China.
HSBC, founded in 1865 as Hongkong and Shanghai Banking Corp., has been moving its resources to Asia, particularly in China, under a strategy formulated by Stuart Gulliver, former CEO of the firm, and further strengthened under John Flint.
The bank recently stated that by the end of 2022, it would stick to its plans to hire over 600 new employees for HSBC’s wealth business in Asia, with over half of the jobs to be added through this year.