HSBC to Slash Thousands of Jobs After CEO Ouster
August 05 2019 - 3:59AM
Dow Jones News
By Margot Patrick
HSBC Holdings PLC plans to slash thousands of jobs and slow
investment spending after the surprise ouster of Chief Executive
John Flint.
Up to 2% of the bank's 237,685 employees could lose their jobs,
a bank executive said Monday, as HSBC flagged a worsening outlook
for the global economy in its second-quarter results.
Finance director Ewen Stevenson in an interview said the job
cuts, which will be targeted at senior roles, would shave up to 4%
off HSBC's wage costs and would come from a mix of layoffs and
attrition as people leave for other jobs. HSBC said severance costs
this year would be $650 million to $700 million, and save it that
much annually going forward.
HSBC late Sunday said Mr. Flint had agreed to leave the CEO job
after just 18 months, ending the 51-year old's three-decade career
at the bank. Chairman Mark Tucker in an interview said Mr. Flint's
departure doesn't signal any change in strategy, but that the board
felt a leadership shift was needed to respond to "an increasingly
complex and challenging global environment."
Mr. Tucker said on Monday the bank remains focused on building
out its business in China, which had been a priority for Mr. Flint
and his predecessor, Stuart Gulliver. Asia-focused HSBC, already
China's largest foreign bank, has long aspired to grow further in
the country' retail and business banking market. Its relationship
with China was tested, though, last year when U.S. prosecutors drew
upon internal bank documents to help build a fraud case against an
executive at Chinese telecommunications company Huawei Technologies
Co. Huawei and the executive deny any wrongdoing.
Parts of HSBC's business also have been under pressure from
trade tensions between the U.S. and China, which has curbed trade
and investment for some customers, albeit to a limited degree,
according to the bank. Mr. Stevenson said a slowdown in global
trade "will have an impact on the business," and that consumer and
business confidence in the U.K. has taken a knock from the U.K.'s
pending exit from the European Union.
The bank said it will miss a target to make a 6% return on
tangible equity in its U.S. business next year, because of adverse
business conditions including U.S. interest rate cuts.
HSBC posted $4.37 billion in net profit for the second quarter,
up from $4.1 billion in the prior-year quarter, on higher
revenue.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
August 05, 2019 03:44 ET (07:44 GMT)
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