(qlmbusinessnews.com via theguardian.com – – Mon, 7th Oct 2019) London, Uk – –
Bank forced to shed jobs due to low interest rates, Brexit and global tariff wars
HSBC plans to lay off up to 10,000 staff, more than 4% of its global workforce, as it embarks on a fresh cost-cutting drive, according to reports.
The cuts will affect mostly high-paid roles and come as the UK-based bank grapples with falling interest rates, Brexit and global tariff wars, the Financial Times reported. HSBC declined to comment.
The bank employed 237,685 people around the world at the end of June.
HSBC boss John Flint resigns ‘by mutual agreement'
The job losses would come on top of 4,700 redundancies – mostly senior jobs – unveiled in early August, when HSBC announced the surprise departure of chief executive John Flint.
Flint left by “mutual” agreement after just 18 months in the job and Noel Quinn, who previously ran the global commercial bank, took over as interim chief executive.
HSBC cited a weaker global outlook at the time, including the cut to US interest rates, the escalation of the trade war between China and the US, unrest in its key Hong Kong market and greater uncertainty around Brexit. Those 4,700 cuts were aimed at reducing salary costs by as much as 4%.
Regarding the latest planned wave of cuts, the FT quoted an unnamed source as saying: “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.
“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 job reductions could be formally announced when HSBC reports third-quarter results at the end of this month. It made pretax profits of $12.4bn (£10.1bn) in the first half, up 16% year on year.
The cost-cutting drive mirrors measures taken by other lenders that 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.
Deutsche Bank has announced 18,000 job cuts, a fifth of its global workforce, and posted its biggest quarterly loss in four years in July. Germany’s second-largest lender Commerzbank plans to cut 4,300 full-time posts – a tenth of its workforce – and shut 200 branches as it restructures. France’s Société Générale is laying off 1,600 people.
By Julia Kollewe