LONDON (AP) — HSBC Holdings, Europe’s largest bank by market value, will cut up to 25,000 jobs globally to reduce costs and shift its center of gravity further toward the fast-growing Asian economies where it started operations 150 years ago.
The bank, which is based in London and has a value of around 120 billion pounds ($184 billion), said Tuesday it is “undertaking a significant reshaping of its business portfolio” and “redeploying resources to capture expected future growth opportunities.”
June 9, 2015 by PAN PYLAS (c) Huff Post Bus.
The HSBC headquarters in Istanbul are pictured on June 9, 2015. Scandal-hit bank HSBC said on June 9 it would cut its global headcount by up to 50,000 as part of a restructuring that entails its withdrawal from Brazil and Turkey, while it also mulls abandoning London as its HQ. AFP PHOTO/ OZAN KOSE (Photo credit should read OZAN KOSE/AFP/Getty Images)
Though it has not yet decided whether to move its headquarters, the bank’s statement shows clearly where it thinks its commercial future lies — China and the Asia-Pacific region.
HSBC has historic ties to the region. It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe, much of it involving opium. Its original name, later shortened to HSBC, says it all: The Hongkong and Shanghai Banking Corporation.
“The world is increasingly connected, with Asia expected to show high growth and become the center of global trade over the next decade,” said Stuart Gulliver, HSBC’s chief executive. “We recognize that the world has changed and we need to change with it.”
HSBC, which has operations in over 70 countries and around 51 million customers, said it intends to sell its operations in Turkey and Brazil, a move that will see its workforce reduce by around another 25,000. Although planning to dispose of its operation in Brazil, HSBC said it plans to maintain a presence in that country to serve large corporate clients in their international dealings.
Overall, HSBC aims to cut costs by $4.5 billion to $5.0 billion by the end of 2017 and reduce the number of full-time employees by around 10 percent, equivalent to between 22,000 and 25,000.
About 8,000 of those lost jobs will be in Britain. The bank hopes many will come from attrition, by not filling posts that are vacated.
A top union official in Britain said the expected job cuts represented the latest example of a workforce being punished for the misconduct of others, notably those in senior management and investment banking. HSBC has paid billions in fines globally to settle investigations of market rigging and allegations it helped clients evade taxes and launder money.
“After all the scandals of recent years, front-line staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation,” said Dominic Hook of Unite union.
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