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Tuesday 20th March 2018

HSBC to Cut 10,000 Jobs amid Weak Global Outlook


7Dnews London

Tue, 08 Oct 2019 13:33 GMT

HSBC is planning to make up to 10,000 staff redundant, a report quoted by AFP said on October 7th, just weeks after the bank cited a weak global outlook to announce the resignation of its chief executive and the cutting of 4,000 posts.

The latest job losses, mostly in highly paid posts, are part of a fresh cost-cutting drive by interim boss Noel Quinn as the global 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 FT 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 London-headquartered bank announced the surprise exit of CEO John Flint in August, after just 18 months in the top job, but gave no reason for the decision.

HSBC revealed, also in August, it would axe 2% of its global workforce, or roughly 4,000 mostly management jobs, in a new restructuring aimed at surviving the difficult global environment.

Nevertheless, the bank reported first-half net profits up 18.6% on-year to $8.5 billion. It is due to report third-quarter earnings at the end of October.

This latest cost-cutting drive is in line with other lenders who are weathering the storms in global finance.

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.

Last month, Germany's second-largest lender Commerzbank said it plans to cut the equivalent of 4,300 full-time posts, 10% of its workforce, and shut 200 branches as it restructures.

Deutsche Bank has announced 18,000 job cuts and France's Société Générale 1,600.