Wed, Jun 03, 2015 - Page 15 News List

HSBC mulling massive job cuts

OVERHAUL:Sources suggested that as many as 20,000 employees could face losing their jobs and that the lender might decide to move its headquarters away from London

Reuters, LONDON and HONG KONG

HSBC Holdings PLC could announce thousands of job cuts at a strategy day next week, Sky News reported on Monday, part of company chief executive Stuart Gulliver’s overhaul plan that could also see him sell operations in Brazil and Turkey, and take a knife to his investment bank.

An estimated 10,000 to 20,000 jobs are to be axed, Sky News said, citing unidentified sources.

The number has not yet been finalized and Gulliver is to lay out the plans at an investor presentation on Tuesday, the broadcaster said.

It was unclear how many of those cuts would come from moves already announced by the lender.

HSBC declined to comment on the report.

Low interest rates and tougher regulations have hurt HSBC more than most other banks in recent years, meaning Gulliver has missed some of his profit and cost targets.

In response, he has sold or exited 77 business units since he took the helm a little more than four years ago.

In February he said businesses in Turkey, Brazil, Mexico and the US needed to improve or be sold.

HSBC is now looking to sell the Brazil business and Gulliver is expected to confirm on Tuesday that its loss-making Turkey business is also on the block.

Substantial overhauls to HSBC’s US and Mexico businesses are also on the cards.

Sky said the job cuts would not include the impact of any sale of the bank’s Brazil and Turkey businesses.

Less certain are Gulliver’s plans for global banking and markets (GBM), the investment banking division he ran for four years before becoming chief executive and which contributes one-third of the bank’s overall profits.

Several investors and analysts say HSBC has been slower than rivals to restructure its investment bank and that Gulliver needs to cut its rates and credit business.

The GBM division saw profits fall by US$1.1 billion last year compared with a year earlier amid tougher market conditions for investment banks.

Gulliver is also expected to provide more details on whether HSBC should move its headquarters from London.

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