HSBC, Britain's largest bank, will axe 1,400 jobs in the UK in the next six months in order to cut costs due to the difficult economic environment and as a response to extra regulations imposed by the Government.
The jobs will go from its head office in Canary Wharf in London and from regional offices in Southampton, Birmingham and Sheffield.
HSBC, which currently employs 43,800 people in the UK, made the announcement about its plans to cut staff to its workforce yesterday.
Bill Dalton, chief executive of HSBC, said: "This is a painful decision, but one we have to take in order to ensure our future competitiveness."
The downsizing is expected to include about 700 redundancies, with most of that number being done on a voluntary basis. There will probably be a small number of compulsory redundancies as part of the programme, which will affect managers as well as junior staff in its administrative and IT functions. HSBC aims to achieve the rest of the planned reduction by not replacing staff as they leave. It said it would consult staff over the next few months and has set aside £1.5m to offer counselling to employees.
Unifi, the union for the financial services industry, raised the alarm about the possibility of compulsory redundancies and warned that the level of cuts could leave staff who stay over-stretched.
Rob O'Neill, national secretary of Unifi, said: "If the bank sticks rigidly to [its] proposed time scale and cannot reassure those staff remaining about future workloads, this will be seen as no more than a cost-cutting exercise designed to get people off the books before the end of the year in order to increase returns to shareholders."
HSBC said it had made clear when it signalled its intention to move all of its head office operations from 14 offices in the City to its one new building in Canary Wharf that it would strip out processes which were duplicated.
It also said it needed to slash costs to respond to the glum economic environment and also because the Government has imposed a host of new regulations on UK banks, such as the requirement to pay interest on current accounts for small businesses.
HSBC has estimated this costs it £80m a year. The bank also predicts profits for all major UK banks will be squeezed as the result of the current investigation by the Office of Fair Trading into interchange fees.
The group has also had to contribute towards the £200m high street banks collectively stumped up to fund the Government's project to create a "universal bank" through the Post Office for those who traditionally have not used banking services.Reuse content