HSBC plc slashes 25,000 jobs


HSBC plc (LON:HSBA) has announced it will slash 25,000 jobs in an effort to cut costs and make the bank less complex. London’s largest listed bank who makes most of thier profit in Asia has said that it will also dispose of Turkish and Brazilian units.

HSBC has come under pressure from investors of late as it has been slow to streamline the business in the face of increased regulations and higher costs. Some say the move is too little too late.

“Slaughtering the staff is not necessarily the solution unless management makes the bank considerably less complex,” said James Antos, analyst at Mizuho Securities Asia.

Shares in HSBC initially trade lower in London but pushed higher after the first hour of trading.

The move aims to save $5 billion per year by 2017, however these savings will come with their own costs; it is expected that the savings exercise will require $4.5 billion over the next 3 years.

8,000 jobs will be cut from UK operations with many branches facing a lower level of staff. Much of the other cuts will come from global IT and back office functions.

Investment banking will also see job cuts, the cost of compliance is becoming cumbersome for global banks and many banks have already slashed investment banking units. HSBC has been slow to react to regulatory changes but today’s announcement is being welcome by some investors.

“The market is likely to respond positively on the move with investors having a much clearer idea of HSBC’s direction going forward,” said Steven Leung, a sales director at UOB Kay Hian in Hong Kong.

Shares in HSBC trade at 621.2p at 9:21am London time.

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