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HSBC to axe 25,000 jobs worldwide
Banking giant to cut up to 25,000 jobs, and exit operations in 20 countries as it looks to save billions of dollars
Last Modified: 01 Aug 2011 11:14
Along with the massive staff layoffs, HSBC will sell 195 bank branches in the US for $1bn in cash [Reuters]

HSBC, Europe's biggest bank, has said it will eliminate up to 25,000 jobs worldwide as part of a major cost-cutting drive, including a retreat from countries where it is struggling.

The job cuts were announced on Monday despite an additional disclosure from HSBC that its first-half net profits jumped 35 per cent.

"There will be further job cuts," Stuart Gulliver, the chief executive, said on a conference call after the group published its interim results.

"There will be something like 25,000 roles eliminated between now and the end of 2013."

The bank, which reported a better-than-expected 3 percent increase in pretax profits to $11.5bn in the six months to June, has already cut 5,000 jobs this year.

The cuts equate to roughly 10 per cent of HSBC's total workforce. They come on top of proposed reductions in overall employees, in a plan to focus on HSBC's Asian operations, according to Reuters news agency. 

Gulliver's far-reaching plan, unveiled three months ago, aims to reduce costs and he intends to sell, shut or slim down retail banking in 20 countries.

Reversal of strategy

The bank is reversing a strategy that had been criticised for "planting flags" around the world, Reuters  reported.

HSBC said on Sunday it would sell 195 US branches to First Niagara Financial for about $1bn in cash, and
close another 13 of the 470 sites it had.

The bank also intends to sell HSBC's US credit card portfolio, which has more than $30bn in assets, a move which would free up capital.

Following the better-than-expected results and job cuts announcement, HSBC shares rose 3.4% in early London trading

Rivals are also cutting jobs and shaking up their business model as the eurozone debt crisis has hit fixed income trading revenues hard and tougher regulations are hurting returns for investors.

The bank highlighted on Monday risks to global economic recovery from increased regulation, particularly as governments grapple with sovereign debt crises and try to plug holes in their budgets.

"The pace and quantum of regulatory reform continues to increase at the same time as the global economy appears to be losing momentum in its recovery," HSBC said.

Source:
Agencies
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