Another 14,000 jobs to go at HSBC?

It's already been on a huge cost-cutting drive, but today the UK's largest bank announced that it might have to shed another 14,000 people.

by Michael Northcott
Last Updated: 19 Aug 2013

The atmosphere in HSBC offices everywhere must be tense today. The bank has announced yet another round of planned redundancies, which could see as many as 14,000 people booted out, on top of the 3,000 it announced just a few weeks ago. If such a layoff comes to fruition, it will mean that the firm’s headcount will be down to around 240,000 from 300,000 just two years ago.

But the bank has already saved $4bn through cuts since CEO Stuart Gulliver took over in 2011, so why more job cuts at all? Well, it is part of a larger restructuring plan. Gulliver wants to save another $3bn per year to offset the cost of what he describes as increasingly burdensome regulation. He also wants to focus on fast growing markets in Asia.

In a statement – and prepare for jargon overload - Gulliver said: ‘We have transformed HSBC in the first phase of the execution of our strategy. We have announced the closure or disposal of 52 non-strategic or underperforming businesses, achieved $4bn of annualised sustainable cost savings and generated double-digit loan growth in 15 priority markets. HSBC is now simpler, easier to manage and ready to take advantage of growth opportunities.’

You’ll notice that he avoided mentioning further redundancies, instead referring rather euphemistically to ‘sustainable cost savings’ that have already been ‘achieved’. Nonetheless, his plans seem to be working: last week HSBC reported a massive fall in losses, with bad debts down 51% to $1.2bn over the last three months. Underlying profit was £5.4bn, sailing past Lloyds’ £2bn first-quarter profit and the meagre £826m over at stricken RBS. 

All the cost cutting and bad-debt control has helped the big banks back into hefty profits. All they have to do now is start lending again. How much more fat-trimming HSBC can take will be interesting to watch, but for the time being, it looks like Gulliver’s Travails are literally paying dividends.

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