HSBC (The Hongkong and Shanghai Banking Corporation) Holdings Plc plans to lay off up to 10,000 staff jobs globally ( as per a Financial Times report.) These job cuts are seen as an outcome of shifts in the global banking sector, falling interest-rates, trade war between China and the United States and uncertainties stemming from the global trade war and Brexit. According to the FT report, the move comes as part of a cost-cutting drive by HSBC interim chief Noel Quinn.
The slowdown in the UK economy considering uncertainty regarding Brexit has been hurting the bank, and the bank had earlier downgraded its forecasts. These changes also led to the departure of John Flint as Group Chief Executive and as a Director of HSBC Holdings, earlier in August 2019. He lasted about 18 months in the job and had a rather unceremonious exit, followed by the appointment of Noel Quinn as interim Group Chief Executive.
On the announcements of its interim results in August 2019 – the company statement said – “The outlook has changed. Interest rates in the US dollar bloc are now expected to fall rather than rise, and geopolitical issues could impact a significant number of our major markets. In the near term, the nature and impact of the UK’s departure from the European Union remain highly uncertain. Given the prevailing outlook for interest rates and revenue headwinds in GB&M and RBWM, we do not expect to achieve our 6% RoTE target in the US by 2020.”
In 2011 as well, HSBC had undertaken massive layoffs involving over 30,000 jobs. The layoff during the tenure of then HSBC Group CEO Stuart Gulliver and was aimed at cutting $3.5 billion in costs over three years to raise the bank’s return on equity to 12-15%.
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