HSBC Plans Job Cuts as Interim CEO Seeks to Make his Mark

By Margot Patrick 

LONDON -- HSBC Holdings PLC is planning further job cuts to its 238,000 workforce, a person familiar with the matter said Monday, as interim Chief Executive Noel Quinn looks to make his mark on the bank as he competes for the top job.

The cuts are in addition to around 5,000 job cuts that were announced earlier this year. Up to 8,000 jobs would leave the bank under plans to sell its French retail banking unit, first reported by The Wall Street Journal in September.

HSBC shares fell 0.76% in early London trading, in line with other banks in a broadly lower stock market.

Mr. Quinn -- who is vying to become the permanent CEO after replacing John Flint on an interim basis in August -- is trying to cut the bank's cost base in anticipation of lower revenues in key markets, including Hong Kong. The Chinese territory is one of HSBC's two main markets along with the U.K. In August, HSBC's finance chief Ewen Stevenson said the bank expects "some impact" in the second half from antigovernment protests in the territory but said Hong Kong fundamentally remains "robust."

The U.K.'s plan to exit from the European Union has also weighed on household and business spending, with the British economy contracting in the second quarter for the first time since 2012.

HSBC, along with other banks, has been seeking to automate more jobs, such as branch staff and data entry for trade finance contracts. In 2011, it embarked on a bank-wide restructuring that caused it to exit dozens of businesses and several countries outright.

Executives say it will continue to narrow its focus, including pruning back in retail banking in countries where it doesn't have sufficient scale. However, its underperforming U.S. retail bank is in the process of opening 50 new branches in key markets such as New York and California, where it is seeking to attract expatriates and wealthier customers with international ties.

HSBC said in August it would pay around $650 million to $700 million in severance costs this year, to save around the same amount annually going forward. It said those costs were to achieve "cost-efficiency measures across our global businesses and functions."

The Financial Times on Sunday said up to 10,000 jobs could leave the bank through the fresh round of cost cutting and the French retail disposal.

Write to Margot Patrick at [e-mail]

(END) Dow Jones Newswires

October 07, 2019 06:38 ET (10:38 GMT)

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