Tags: US | HSBC | Job | Cuts

HSBC to Cut 10,000 Jobs

Sunday, 31 Jul 2011 08:01 PM

 

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HSBC plans to announce thousands of job cuts on Monday as part of an ongoing cost-cutting program announced in May, according to media reports.

The British banking company is expected to announce it is cutting 10,000 jobs, or 3 percent of its workforce, when it reports earnings on Monday, the New York Times reported Sunday, attributing the information to "a person with direct knowledge of the decision."

HSBC spokesman Neil Brazil in New York declined to comment on the report.

HSBC Holdings PLC told investors in May that its new management team was implementing a strategy that would shift focus away from retail banking to commercial and corporate banking, and would target investment in high-growth economies.

Chief Executive Stuart Gulliver, who moved into his job at the start of the year, said the bank will be directing investment to fast-growing markets, such as Mexico and Turkey, and scaling back elsewhere by, for instance, withdrawing from retail banking in Russia. These and other moves are intended to trim costs by up to $3.5 billion within three years.

The bank is still dealing with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest subprime lender in the United States at the time, which resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

As part of its strategic realignment, the bank also said Sunday that it will sell 195 retail bank branches, most located in upstate New York, to First Niagara Bank in a deal worth about $1 billion. The companies expect the all-cash transaction to be completed early next year. First Niagara, a unit of First Niagara Financial Group Inc. of Buffalo, N.Y., said in a statement that it expects to retain most of the 1,900 workers currently employed by the affected banks.

The New York Times said the planned job cuts were first reported by British news broadcaster Sky News.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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