HSBC Holdings has announced that it would cut around 35,000 jobs over the next three years. The bank is also planning to shrink its investment and shed USD 100 billion in assets to revamp its business in Europe and the United States. One-third of HSBC branches in the US will be closed as the focus is shifting towards Asia and the Middle East. The job cut will affect roughly 15 per cent of its employees and bring down the number of workers to 200,000. However, the exact figures have not been finalized. The development comes as HSBC has been grappling with slowing growth in some of its major markets. Factors that are affecting the growth are the coronavirus epidemic, exit from Britain European Union and lover central bank interest rates. The bank is also trying to become more competitive to keep pace with more focused and leaner rivals. The changes are expected to cost USD 7.2 billion in the next three years.
“In the long history of HSBC bank, this is going to be one of the deepest restructurings,” said interim chief executive Noel Quinn. Quinn also said there are chances of ‘meaningful’ workforce reductions in HSBC’s home market of the United Kingdom. These job cuts will be the result of the digitization of the banking process and the implementation of better technologies. Quinn took over as the chief executive officer of the bank after John Flint resigned in August. Flint stepped after spending less than two years in the position. Analysts expressed concern that Quinn, despite not been confirmed as permanent CEO of the blue-chip lender, is spearheading the restructuring process.
Earlier in August, the bank had fixed a time frame of six to 12 months to announce a permanent chief executive officer. Meanwhile, the bank has suspended buying its own share for two years to pay for the restructuring. HSBC has already purchased around USD 6 billion of its shares since 2016. The profit before tax nosedive to USD 13.3 billion in 2019.