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In a move to overhaul its operations, British bank HSBC will be laying off thousands of workers around the world. The bank announced on Monday (5 August) that it will be letting go of 2% of its global workforces – about 4,000 workers – as part of a new restructuring exercise in order to weather global turmoil.
However, HSBC said that Singapore ‘remains key’ to its growth.
According to the bank’s latest annual report, HSBC employs about 235,217 people as of December 2018. The job cuts, according to Chief Financial Officer (CFO) Ewen Stevenson, will be targeted towards the ‘more senior ranks’. As a result of the cuts, HSBC will end up paying out a total of US$650-700 million (S$898-967 million) in severance costs.
According to Reuters, the bank declined to disclose more details of the layoffs, not even if the cuts would extend as far as its Singapore unit. HSBC makes more than 80% of its profit in Asia.
Said HSBC Chairman Mark Tucker, “Singapore is one of eight strategic countries that we are investing in. We are putting focus and support to the business, and it remains key to our overall Asian and Southeast Asian ambition.”
“So Singapore is very much part of the future, part of the growth of the group,” he said.
This announcement of layoffs came at the same time the bank announced the sudden exit of its Chief Executive John Flint who has only been in the job for 18 months.
According to a person familiar with the matter who spoke to Reuters, Mr Flint’s departure from the bank was reportedly due to a difference in opinion with the Chairman, Mr Tucker, some of the formers approaches to cutting expenses and setting revenue targets for senior managers to boost profit growth.
On top of that, the bank also disclosed its half-year results on Monday which included a gloomy forecast for its business. They also predicted an escalation in the US-China trade war, an easing monetary policy cycles, and turmoil in two of its key markets, Hong Kong and Brexit.
HSBC’s move to lay off thousands of staff follows that of several other European banks in recent months. Deutsche Bank (Germany) let go of 18,000 employees worldwide in July, Barclays (London) slashed 3,000 jobs in the second quarter of 2019, while Societe Generale (France) announced in April it will be cutting 1,600 jobs.