HSBC Holdings Plc is set to reduce its headcount by thousands as Europe’s largest bank looks to sell its French retail business and clamp down on replacing exiting staff.
HSBC’s planned sale of its French retail bank could take at least 4,000 staff off the lender’s payroll, according to a person familiar with the matter. When that’s combined with cutting back on replacing departing employees, as well as a group-wide streamlining program, the 238,000-strong workforce could decline by as much as 10,000, the person said, requesting anonymity to discuss private deliberations. The Financial Times first reported the cuts.
The plan drawn up by HSBC’s interim chief executive officer, Noel Quinn, envisages role reductions focused on the European and U.S. operations, which have been a drag on profitability at a lender that makes most of its money in faster-growing Asian economies. A spokeswoman for HSBC declined to comment.
In August, John Flint was ousted as CEO of HSBC and replaced with Quinn in part because of his failure to get to grips with the bank’s cost base. Quinn, working with Chief Financial Officer Ewen Stevenson, began working on a cost-cutting plan immediately after his appointment, the person familiar with the matter said.
Cutbacks were already on the rise after the London-based bank began encouraging managers to look for greater savings through a program known internally as Project Oak. That plan allowed managers to assign expenses incurred cutting jobs from their teams to a central account, rather than having to allocate the cost to their own budgets.
Banks across Europe are cutting jobs as they struggle to deal with a combination of low interest rates and sputtering economies. Barclays Plc, Deutsche Bank AG and Societe Generale SA are among those shrinking their workforces.
HSBC was relatively insulated from these pressures due to its outsized exposure to Asia. The bank earns almost 75 per cent of its pretax profit in the so-called Greater China region, in particular through its dominance of the Hong Kong banking market. Protests in Hong Kong have hit the local economy, raising concerns about the impact they will have on the territory’s largest lender.
The bank was founded in 1865 in the former British colony as the Hong Kong and Shanghai Banking Corp. It has expanded to become one of the world’s largest financial institutions, with operations in 65 countries serving more than 40 million customers.
