Standard Chartered PLC, the UK-based, Asian-focused bank, said on Friday that it planned to reduce senior staff positions by 25 percent while cutting costs and reshaping the company under its new chief executive, William Winters.
The reduction in management is part of a plan announced by the bank in July to streamline its business, realign its management and cut costs by at least US$1.8 billion by the end of 2017.
Winters, the former head of JPMorgan Chase & Co’s investment bank, was brought in this year to succeed Peter Sands, the bank’s long-time chief executive, and turn around Standard Chartered, which generates most of its earnings in Asia.
The staff cuts were announced in an internal memorandum on Friday.
“Bill’s note to staff is an update on what we said we were going to do,” Standard Chartered said in a separate statement on Friday. “In it, he has made it clear that kick-starting performance is a priority, and we are not standing still.”
It added: “On head count, we said previously, when we announced the management team and organizational changes in July, that there would be further personnel changes to come as we simplify our organizational structure. We have already acted to reduce management layers and as a result will have up to 25 percent fewer senior staff.”
The bank is expected to cut about 1,000 management positions out of about 4,000, a person familiar with the lender’s plans said on Friday. The employees losing their jobs are expected to be notified by the end of next month.
Standard Chartered has been hit hard by a slowdown in emerging markets, as well as by impairments for bad loans and “challenging” trading conditions in some business lines in recent quarters, including currency hedging products.
In the first half of the year, the bank’s profit declined 37 percent as its results were hit by currency fluctuations, exits from several businesses and lower valuations on loans. The bank also said when it announced its results in August that it was cutting its dividend to bolster capital.
On a conference call with reporters in August, Winters said the bank was facing “real challenges” and had a legacy of focusing “on growth over risk discipline and returns.”
“We have also been too slow to take hard decisions, whether those are on costs, people or strategy,” he said at the time.
As part of its overhaul, Winters previously said that the bank would streamline its business to three main divisions — corporate and investment banking, commercial and private banking, and retail banking — and that the management team would report directly to him.
Standard Chartered plans to cut US$1.8 billion in costs over the next three years, including US$400 million in savings this year. The lender said in August that it had reduced its workforce by 5 percent, or about 5,000 jobs, since the end of last year.
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