HSBC Plans 30,000 Employee Layoffs

HSBC bank has announced they will make 30,000 job cuts by 2013. The company has already shed 5,000 jobs this year with the remaining 25,000 planned by 2013. HSBC is cutting jobs and closing offices to reduce costs by as much as $3.5 billion over the next two years as it tackles wage inflation in faster-growing economies and prepares for stricter capital rules.

HSBC currently employs around 296,000 people worldwide. The bank’s costs in relation to revenue rose to 57.5 percent in the first half from 50.9 percent a year earlier, because of higher staff numbers, wage inflation and other costs, HSBC said as it reported a 36 percent increase in first-half profit. Costs are still higher than its 48 to 52 percent target range, the London-based lender said in a statement today.

HSBC today agreed to sell its upstate New York branch network, comprising almost half its U.S. outlets, to First Niagara Financial Group Inc. (FNFG) for about $1 billion as it pares its operations in North America. The bank is also seeking a buyer for its U.S. credit-card business. The bank sold part of its Russian consumer banking unit last month and on July 28 said it will close its 10 retail branches in Poland, where it employs 263 people.

The bank is still dealing with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest subprime lender in the United States at the time, which resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

As of 2011, HSBC was the world’s second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine. It has around 7,500 offices in 87 countries and territories across Africa, Asia, Europe, North America and South America and around 100 million customers. As of 30 June 2010, it had total assets of $2.418 trillion, of which roughly half were in Europe, a quarter in the Americas and a quarter in Asia.

By: Pat Prescott
Published: Aug 1, 2021
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