HSBC, the biggest bank in Europe, announced that it would shed some 35,000 jobs. The move comes as part of an overhaul to focus on the faster-growing markets in Asia.
The job cuts may also be attributed to the bank’s attempt to cope with multiple global uncertainties, including trade wars, Brexit, and the coronavirus outbreak.
Noel Quinn, the interim chief executive, said on February 18 that the number of the bank’s employees would drop from 235,000 to 200,000 within the next three years. Several of these reductions will come from attritions as opposed to straightforward cuts.
HSBS is based in London but does a chunk of its business in Asia. Currently, it is caught between many uncertainties. From the Hong Kong protests to Brexit and the trade disputes between China and the United States.
Now, the emergence of the coronavirus outbreak is adding more issues as it rapidly disrupts business in the bank’s primary market. HSBC’s net profit dropped 53% to $6 billion in 2019.
However, it warned of ‘significant disruption’ in 2020 to its operations, citing the outbreak of the deadly virus in China. HSBC’s business in Europe is also facing increasing pressure. It has to contend with Britain’s exit from the European Union.
Brexit also comes with various uncertainties that will accompany negotiations for future trade relations. HSBC said in a statement:
“No trade negotiation is ever straightforward. The eventual agreement must protect and fosters the many benefits that financial services provided to both the U.K. and the EU.”
This massive job cut comes amid a significant downsizing in Europe. The restructure comprises the consolidation of some parts of the business and ‘reorganizing’ the global functions and head office, as explained by Quinn.