London-based multinational investment bank HSBC recently said it is resuming plans to cut around 35,000 jobs which it put on hold after the coronavirus outbreak.
The company has also said that It will also maintain a freeze on almost all external hiring. The decision was announced by Chief Executive Noel Quinn said in a memo sent to HSBC’s 235,000 staff worldwide.
“We could not pause the job losses indefinitely – it was always a question of ‘not if, but when’,” Quinn said, adding that the measures first announced in February were “even more necessary today”.
HSBC had earlier postponed the job cuts, part of a wider restructuring to cut $4.5 billion in costs, in March saying the extraordinary circumstances meant it would be wrong to push staff out.
However, Quinn said it now had to resume the programme as profits fall and economic forecasts point to a challenging time ahead, adding that he had asked senior executives to look at ways to cut more costs in the second half of 2020.
The bulk of the job cuts are likely in the back office at Global Banking and Markets (GBM), which houses HSBC’s investment banking and trading, a senior executive familiar with the plans said.
The cuts will also affect senior bankers in Britain who work in GBM and HSBC’s head office, as well as support staff in its businesses around the world, the executive added.
While HSBC expects natural attrition of up to 25,000 roles each year, redeploying all affected staff would be unrealistic, the executive said.
The resumption of job cuts is unlikely to affect the timing or size of dividends HSBC may pay in the future, the executive said, with that decision likely to be based more around the economic outlook for next year and beyond, assuming regulators approve shareholder payouts once more.
HrNxt.com Newsdesk has researchers and writers with an excellent domain knowledge about the talent ecosystem, and the business environment. The team keeps a tab on the latest happenings in the ecosystem to bring most relevant news and insights for our readers. You can connect with our newsdesk at newsdesk@hrnxt.com.