HSBC revives plan for 35,000 jobs cuts delayed by coronavirus pandemic

HSBC had postponed its planned job cuts, part of a wider restructuring to cut $4.5 billion in costs, in March. (Reuters)
Short Url
Updated 17 June 2020

HSBC revives plan for 35,000 jobs cuts delayed by coronavirus pandemic

  • Bank will also maintain a freeze on almost all external recruitment
  • HSBC had postponed the job cuts, part of a wider restructuring to cut $4.5 billion in costs, in March

LONDON: HSBC is resuming a redundancy plan it put on ice after the coronavirus outbreak, and will cut around 35,000 jobs over the medium term, a memo seen by Reuters on Wednesday showed.
The bank will also maintain a freeze on almost all external recruitment, Chief Executive Noel Quinn said in the memo, which was sent to HSBC’s 235,000 staff worldwide.
“We could not pause the job losses indefinitely — it was always a question of ‘not if, but when’,” Quinn said, adding that the measures first announced by HSBC in February were “even more necessary today.”
A bank spokeswoman confirmed the contents of the memo.
HSBC had postponed the job cuts, part of a wider restructuring to cut $4.5 billion in costs, in March saying the extraordinary circumstances of the coronavirus pandemic meant it would be wrong to push staff out.
Quinn said it now has to resume the program as profits fall and economic forecasts point to a challenging time ahead, adding that he had asked senior executives to look at ways to cut more costs in the second half of the year.
The bulk of the job losses are likely to fall in back office roles in HSBC’s Global Banking and Markets division, which houses its investment banking and trading businesses, a senior HSBC executive familiar with the plans said.
HSBC sees natural attrition of up to 25,000 roles each year but redeploying all affected staff to those roles was unrealistic, the executive said.
Shares in HSBC have fallen 27 percent since the start of March, with the pandemic prompting it to set aside $3 billion in bad loan provisions in its first quarter earnings.
Under the initial plan, HSBC said it would merge its private banking and wealth business, pare back its European equity business and reduce its US retail network.


Saudi Arabia’s 6-point plan to jumpstart global economy

Updated 07 July 2020

Saudi Arabia’s 6-point plan to jumpstart global economy

  • Policy recommendations to G20 aim to counter effects of pandemic

DUBAI: Saudi Arabia, in its capacity as president of the G20 group of nations, has unveiled a six-point business plan to jump start the global economy out of the recession brought on by the COVID-19 pandemic.

Yousef Al-Benyan, the chairman of the B20 business group within the G20, told a webinar from Riyadh that the response to the pandemic -— including the injection of $5 trillion into the global economy — had been “reassuring.”

But he warned that the leading economies of the world had to continue to work together to mitigate the effects of global lockdowns and to address the possibility of a “second wave” of the disease.

“Cooperation and collaboration between governments, global governance institutions and businesses is vital for an effective and timely resolution of this multi-dimensional contagion transcending borders,” Al-Benyan said.

“The B20 is strongly of the view there is no alternative to global cooperation, collaboration and consensus to tide over a multi-dimensional and systemic crisis,” he added.

The six-point plan, contained in a special report to the G20 leadership with input from 750 global business leaders, sets out a series of policy recommendations to counter the effects of the disease which threaten to spark the deepest economic recession in nearly a century.

The document advocates policies to build health resilience, safeguard human capital, and prevent financial instability.

It also promotes measures to free up global supply chains, revive productive economic sectors, and digitize the world economy “responsibly and inclusively.”

In a media question-and-answer session to launch the report, Al-Benyan said that among the top priorities for business leaders were the search for a vaccine against the virus that has killed more than half-a-million people around the world, and the need to reopen global trade routes slammed shut by economic lockdowns.

He said that the G20 response had been speedy and proactive, especially in comparison with the global financial crisis of 2009, but he said that more needed to be done, especially to face the possibility that the disease might surge again. “Now is not the time to celebrate,” he warned.

“Multilateral institutions and mechanisms must be positively leveraged by governments to serve their societies and must be enhanced wherever necessary during and after the pandemic,” he said, highlighting the role of the World Health Organization, the UN and the International Monetary Fund, which have come under attack from some world leaders during the pandemic.

Al-Benyan said that policy responses to the pandemic had been “designed according to each country’s requirements.”

Separately, the governor of the Saudi Arabian Monetary Authority said that it was “too early” to say if the Kingdom’s economy would experience a sharp “V-shape” recovery from pandemic recession.