HSBC announced it will be laying off 35,000 employees over the next 3 years after a 33% plunge in profit in 2019.
HSBC interim CEO Noel Quinn said,”It is fair to say that our course direction in the next three years will be to reduce the current number of employees from 235,000 to something closer to 200,000. The group’s performance in 2019 has held up well, but some departments in our activities are not producing acceptable earnings. Since the start of January, the coronavirus outbreak has created significant disruption for our staff, suppliers and customers, particularly in mainland China and Hong Kong. Depending on how the situation develops, there is the potential for any associated economic slowdown to impact our expected credit losses in Hong Kong and mainland China. Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains”.
According to the HSBC Earnings report, which can be found here, some additional insight into the reasoning behind the layoffs was indicated. Some highlights were:
- Reported profit attributable to ordinary shareholders down 53% to $6.0bn
- Goodwill impairment of $7.3bn
- Adjusted expected credit losses and other credit impairment charges (‘ECL’) up $1.1bn to $2.8bn
- Reported loss before tax of $3.9bn
- Adjusted costs of $9.1bn, up 3% or $0.3bn
HSBC, which is currently the largest bank in Europe, was founded in 1865. It currently has 235,000 employees and is considered the 7th largest bank in the world.
