Tags: HSBC | jobs | Gulliver | savings

FT: HSBC Poised to Cut Up to 5,000 More Jobs

Monday, 18 Mar 2013 10:36 AM

By Glenn J. Kalinoski

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Thousands of HSBC employees could lose their jobs as part of the bank’s plan to find $1 billion of savings this year, according to the Financial Times.

Citing people close to the bank, the Times reported that up to 5,000 staff could be eliminated, and if the recent rate of cuts to cost savings was maintained, the total would be closer to 10,000.

Chief Executive Stuart Gulliver spent the past two years attempting to streamline the company’s “global network of fiefdoms, both in order to impose more control from the head office in London and to strip out overlaps and inefficiencies,” the Times stated. Details of Gulliver’s plan are scheduled to be provided to investors in May.

Editor's Note:
How to Pay Zero Taxes . . . Legally

HSBC is expected to sell or close an additional eight to 10 businesses this year and next, along with 49 divested since 2001, according to the report. The new cuts will follow the reduction of staff from 302,000 to 260,000 during the past two years. Approximately 10,000 have been through divestments with the rest due to reductions.

HSBC has exceeded its goal of identifying $2.5 billion to $3.5 billion of cost savings by this year, announcing $3.6 billion of “sustainable annual savings” with 2012 results, according to the Times. But HSBC is far from its target of reducing its cost-income ratio to between 48 and 52 percent. It reached 62.8 percent last year, impacted by a one-time cost of a $1.9 billion fine to U.S. regulators “over money laundering and sanctions abuses.” The cost-income ratio was 56 percent excluding the fine.

HSBC agreed to pay the fine to settle accusations that it failed to enforce rules designed to prevent the money laundering, Reuters reported.

The Department of Justice charged the bank with violating sanctions laws by doing business with customers in Iran, Libya, Sudan, Burma and Cuba.

”We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes,” Gulliver said, according to Reuters.

According to the agreement, HSBC allowed at least $881 million in Mexican drug trafficking proceeds to be laundered through the bank, Reuters reported.

Editor's Note: How to Pay Zero Taxes . . . Legally

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