HSBC plans to cut some 35,000 jobs over the next three years and slash $100 billion in assets as it undertakes a huge restructuring following a steep drop in profits.
Europe’s largest bank by assets announced the effort Tuesday as it revealed net profits plunged 53 percent last year to $6 billion amid political unrest in Hong Kong, uncertainty about the UK’s split from the European Union and the lingering threat of the coronavirus outbreak.
HSBC will close about 30 percent of its branches in the US, merge its wealth and private banking businesses, and cut European stock trading in an effort to reduce costs by $4.5 billion, bank officials said.
“The totality of this program is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years,” said Noel Quinn, HSBC’s interim chief executive.
Chief financial officer Ewen Stevenson said there will be “meaningful job cuts” in HSBC’s London headquarters and its investment bank, The Wall Street Journal reported. Attrition will help achieve the job reductions as 25,000 people currently leave the company each year, according to Quinn. HSBC’s workforce includes about 40,000 people in the UK, another 40,000 in India, 31,000 in Hong Kong and 10,000 in the US.
HSBC’s US-listed shares tumbled 4.9 percent in premarket trading to $36.06 as of 7:33 a.m. Tuesday as the bank’s London-listed stock slid about 6.6 percent.
The company warned its financial performance could take a further hit from the coronavirus outbreak, which it said has “created significant disruption for our staff, suppliers and customers.”
HSBC said it has lowered its expectations for growth in the Asian economy this year because of the effects of the outbreak that has killed nearly 1,900 people. A resulting economic slowdown could affect the bank’s expected credit losses in mainland China and Hong Kong and potentially reduce revenue in the longer term thanks to smaller lending and transaction volumes, the company said.
HSBC expects to shoulder about $6 billion in restructuring costs, largely this year and next year. The company will also suspend stock buybacks for two years to help pay for the restructuring plan.
With Post wires
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