Bank forced to shed jobs due to low interest rates and global uncertainty, FT reports
HSBC is planning to lay off up to 10,000 staff, according to reports on Monday, just weeks after its chief executive stepped down and announced the axing 4,000 posts citing a weak global outlook.
The cuts are reported to be mostly be in high-paid roles and would form part of a fresh cost-cutting drive by new boss, Noel Quinn, as the bank struggles to adjust to falling interest rates, Brexit and the long-running trade war, the Financial Times reported.
“We’ve known for years that we need to do something about our cost base, the largest component of which is people – now we are finally grasping the nettle,” the paper quoted an unnamed source as saying.
“There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”
The bank, which is Britain’s second largest company by market value, last month announced the surprise exit of chief executive John Flint after just 18 months in the job but gave no reason for the decision.
At the same time it revealed it would axe 2%t of its global workforce, or roughly 4,000 mostly management jobs, in a new restructuring aimed at weathering the global turmoil.
It reported first-half net profits of $8.5bn last month, a rise of 18.6% and is due to report third-quarter earnings at the end of this month.
The cost-cutting drive is in line with other lenders who are battling global headwinds.
US banks including JPMorgan Chase and Wells Fargo have lowered their 2019 profit forecasts tied to interest rates as central banks around the world loosen monetary policy in response to a weakening global growth outlook.
Lower interest rates mean less profit on loans made by the banks, especially if they have offered higher returns on deposits to attract customers.
And last month Germany’s second-largest lender Commerzbank said it planned to cut the equivalent of 4,300 full-time posts – a tenth of its workforce – and shut 200 branches as it restructures.
Deutsche Bank has announced 18,000 job cuts and France’s Societe Generale 1,600.