Europe’s largest bank, in an effort to stem sluggish growth and boost profits, is eliminating up to 50,000 jobs in next few years as it cuts costs and sells unprofitable businesses to focus on Asia.
HSBC said the changes are part of a major restructuring plan designed to save the British bank $5 billion a year by 2017.
“The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade,’’ said CEO Stuart Gulliver in a news release, adding that he is confident the actions will lead to future growth and higher returns for shareholders.
HSBC, which has operations in 73 countries and territories, said it would eliminate 22,000 to 25,000 of the bank’s jobs, or about 10% of its workforce, by the end of 2017.
Another 25,000 positions would be cut through the sale of underperforming businesses in Brazil and Turkey, reducing its total global workforce to about 208,000 people.
The plans announced June 9 mark the second round of major job cuts since Gulliver took the helm in 2011. HSBC shed about 37,000 jobs from 2011 to 2014 but the impact was less than expected because of sharp increases in regulatory and compliance costs.
Sales of its businesses in Brazil and Turkey, where HSBC is the sixth and 12th largest bank respectively, could reap more than $4 billion for HSBC. Negotiations with prospective buyers are well under way in both countries.
HSBC also announced that it will emphasize online banking and automated services, allowing the bank to close 12 percent of its branches in its seven biggest markets. Worldwide, it has 6,100 offices and 51 million customers.
The bank was founded in London in 1991 by the Hongkong and Shanghia Banking Corp., which traces its roots to Hong Kong in 1865. The name is derived from the founding company’s initials.
Despite the British home address, HSBC still has close ties to the Asia-Pacific region, where it generates more than half of its earnings. As part of its restructuring plan, it plans to shift assets cut in Europe and the Americas to China and Southeast Asia, particularly China’s Pearl River Delta in southern Guangdong province.
The job cuts come as HSBC considers moving its headquarters from London to Asia, possibly Hong Kong. A decision on the move is expected by the end of the year.
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