HSBC Plans Job Cuts as Interim CEO Seeks to Make his Mark
October 07 2019 - 6:53AM
Dow Jones News
By Margot Patrick
LONDON -- HSBC Holdings PLC is planning further job cuts to its
238,000 workforce, a person familiar with the matter said Monday,
as interim Chief Executive Noel Quinn looks to make his mark on the
bank as he competes for the top job.
The cuts are in addition to around 5,000 job cuts that were
announced earlier this year. Up to 8,000 jobs would leave the bank
under plans to sell its French retail banking unit, first reported
by The Wall Street Journal in September.
HSBC shares fell 0.76% in early London trading, in line with
other banks in a broadly lower stock market.
Mr. Quinn -- who is vying to become the permanent CEO after
replacing John Flint on an interim basis in August -- is trying to
cut the bank's cost base in anticipation of lower revenues in key
markets, including Hong Kong. The Chinese territory is one of
HSBC's two main markets along with the U.K. In August, HSBC's
finance chief Ewen Stevenson said the bank expects "some impact" in
the second half from antigovernment protests in the territory but
said Hong Kong fundamentally remains "robust."
The U.K.'s plan to exit from the European Union has also weighed
on household and business spending, with the British economy
contracting in the second quarter for the first time since
2012.
HSBC, along with other banks, has been seeking to automate more
jobs, such as branch staff and data entry for trade finance
contracts. In 2011, it embarked on a bank-wide restructuring that
caused it to exit dozens of businesses and several countries
outright.
Executives say it will continue to narrow its focus, including
pruning back in retail banking in countries where it doesn't have
sufficient scale. However, its underperforming U.S. retail bank is
in the process of opening 50 new branches in key markets such as
New York and California, where it is seeking to attract expatriates
and wealthier customers with international ties.
HSBC said in August it would pay around $650 million to $700
million in severance costs this year, to save around the same
amount annually going forward. It said those costs were to achieve
"cost-efficiency measures across our global businesses and
functions."
The Financial Times on Sunday said up to 10,000 jobs could leave
the bank through the fresh round of cost cutting and the French
retail disposal.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
October 07, 2019 06:38 ET (10:38 GMT)
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