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Asia-Pacific
HSBC to axe more staff to save costs
Some 3,000 employees in Hong Kong to lose jobs as British bank aggressively seeks to bring down costs.
Last Modified: 07 Sep 2011 13:55
HSBC in August said it would sack 30,000 people worldwide by 2013 to cut annual costs by $3.5bn [Reuters]

HSBC is cutting about 3,000 jobs in Hong Kong over the next three years as the first step in its aggressive cost-cutting plan on five countries, a top official has announced.

"We will be focusing primarily on our support functions as we restructure to reduce management layers and improve efficiency," Peter Wong, HSBC Asia-Pacific chief executive, said on Wednesday in an email to employees seen by Reuters.

"This does mean jobs will be eliminated ... Our best estimate at this time is that approximately 3,000 existing roles will be reduced over these three years."

The British bank said in August that it is cutting 30,000 jobs worldwide by 2013 - about 10 per cent of its work force - and selling almost half its retail bank branches in the US to save up to $3.5bn.

The Hong Kong job cuts are part of Chief Executive Stuart Gulliver's reorganisation plan to focus on fast-growing emerging markets, thereby also including cuts at operations in the US, Canada, Mexico and Brazil.

His restructuring will see HSBC exit or scale back in countries such as Poland, Russia and the United States, where it lacks scale and has been struggling to compete.

Amid the ordered sackings, 15,000 new jobs were likely to be added in Asia and other emerging markets, Gulliver said last month.

Slimming down

HSBC joins other major banks which have axed or announced plans to cut over 70,000 jobs this year, in an attempt to slim down after a slowdown in capital markets and tougher regulations leaving many looking bloated.

Large shareholders are now pressing for cost cuts to improve returns as big banks are not raking in the profits they used to earn from large bets on risky trading and complicated investments, which backfired and fueled the global financial crisis.

HSBC added $3.3bn of costs in 2009-10, with no extra revenue to show for it.

"For all of HSBC's strengths as an organisation, and there are many, we can be needlessly complex and bureaucratic," Wong's email said.

"This complexity reduces our effectiveness and efficiency."

Gulliver, the CEO, has said the bank's cost base was "unacceptable" and that costs need to get below 52 per cent of income, compared with 57.5 per cent in the first half of this year.

Source:
Agencies
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