A total of 25,000 jobs would be reduced globally that indicates close to 10% or 266,000 of the company’s workers will be dismissed.
“The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade”, said Stuart Gulliver, HSBC’s chief executive.
The United Kingdom bank levy, which costs HSBC £700m a year, will affect the decision, leading to speculation that Chancellor George Osborne could launch a review in his Mansion House speech tomorrow. The previous effort was foiled by high compliance costs, fines, low interest rates and sluggish growth.
The bank is expected to reveal more details during a conference call with investors on Tuesday (June 9).
“We recognise that the world has changed and we need to change with it“. Earlier this year, the bank said it may move its head office out of London.
In a statement to the Hong Kong Stock Exchange, HSBC stated that it is now undertaking a significant reshaping of its business portfolio. Although planning to dispose of its operation in Brazil, HSBC said it plans to maintain a presence in that country to serve large corporate clients in their global dealings. It aims to overhaul underperforming businesses in Mexico and the United States to improve returns. In the U.S. the bank will focus on worldwide customers, and less on domestic operations.
With regard to the group’s possible new base, Gulliver said “there is an opportunity to create another Hong Kong” in Guangdong. However, the access to dollar funding and global clients means it is still a key country for the bank.
HSBC today said it will slash as many as 50,000 jobs and shrink its investment bank by a third to combat sluggish growth across its sprawling empire. The automation of operations will help cut 12,000 to 13,000 of those jobs, the bank said.
The Birmingham move comes amid new rules demanding certain bank operations are ring-fenced from riskier investment roles. This included investing more in technology to find cost savings, which has been a common bank trend as more look to increase efficiency with computers instead of actual people.
The bank also said that it would consider at the end of the year whether it will remain headquartered in London, citing the possibility of Britain’s exit from the EU as one of the considerations it would have to make.
