HSBC to cut 35,000 jobs as profits fall by a third

Bank aiming to slash £3.5bn in costs as part of major corporate overhaul

HSBC has announced it will axe 35,000 jobs worldwide as part of a major restructuring after the bank’s profits fell by a third last year.

The bank is aiming to scale back its headcount from 235,000 to 200,000 over the next three years as it attempts to cut £3.5bn in costs by 2022 and shed more than £70bn of assets.

It said last year’s fall in profits was largely due to £5.6bn in write-offs related to its Global Banking and Markets and Commercial Banking divisions in Europe.

The bank has been carrying out a corporate overhaul designed to boost profitability by focusing on high-growth markets in Asia while shedding businesses and workers in other countries.

“Parts of our business are not delivering acceptable returns. We are therefore outlining a revised plan to increase returns for investors,“ Noel Quinn, the bank’s interim chief executive, said in a statement.

“Our immediate aims are to increase returns, create the capacity to invest in the future, and build a platform for sustainable growth.”

The bank said it would shrink its sales, trading and equity research in Europe and shift resources to the Asian markets, which account for around half of HSBC’s revenue and 90 per cent of profits.

In the US, HSBC plans to grow its international client corporate banking business.

Slow economic growth in HSBC’s major markets has also taken its toll.

The bank said the coronavirus outbreak has caused “significant disruption” for its staff, suppliers and customers, especially in the Chinese mainland and in Hong Kong.

“Depending on how the situation develops, there is the potential for any associated economic slowdown to impact our expected credit losses in Hong Kong and mainland China,” the bank warned.

“Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains. We continue to monitor the situation closely.”

Britain’s protracted withdrawal from the European Union, and the uncertainty this has brought, along with historically low interest rates around the world have similarly impacted HSBC’s profitability.

The bank operates in more than 50 countries across the globe, and employs more than 40,000 people based in the UK.

This will be the third time in a decade that HSBC has launched a structural overhaul in a bid to lift falling profits.