After the decision to see 4,700 out of their jobs in August, HSBC Bank Plc, one of the largest banking and financial services organisations in the world has decided to kick an extra 10,000 staff members out of their jobs.
The Details: The members of staff at the receiving end of this job loss, are high-paid roles which will reduce the global workforce by 4% as the bank is struggling with falling interest rates, Brexit and global tariff wars.
For Noel Quinn, the new interim boss, this is his first major decision after the shocking resignation of former CEO John Flint in August who left the job after fallouts with Mark Tucker, the new Chairman. He was blamed for failing to make tough decisions which involved cutting people’s jobs. He supervised the lender’s decision to let over 4,000 go two months ago.
A source said the decision had been in the cooler for a long time as the bank’s huge cost base was a worrisome factor.
“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 source said.
Worse hit locations: The job losses affected HSBC’s European operations majorly, where returns have been unimpressive compared to its Asian division. It was the only region to record a loss, totalling £520 million, in the first half of the year.
“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 source said.
Workers’ Union caught by surprise: The news was not favourable as it caught members of the staff Union, known as Unite unawares. Unite gave a strong-worded response in a statement credited to them.
“Unite is appalled by press reports of 10,000 job cuts globally and has raised urgent questions with the management of the bank in order to get vital answers on behalf of our members working within HSBC,” the Union responded.
What you should know: HSBC is not the first Bank to tow this line. Investment banks have suffered from increased competition from automated trading while increased capital requirements set to come into effect in 2022 is expected to make trading less profitable for several industry players.
Banking peers like JP Morgan Chase and Wells Fargo have lowered their 2019 profit forecasts as central banks around the world loosened their monetary policy in response to a weakening global growth outlook.
The worst year to be a bank employee: It’s been a brutal year for bank employees. Deutsche Bank started by announcing 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. Barclays said it had already cut 3,000 jobs globally in the first half of the year