HSBC to cut 35,000 jobs

By: Miguel A. Rodriguez

09:45, 14 September 2020

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The pandemic only delayed something otherwise inevitable.

The pandemic has affected not only small businesses but also significant banks. If earlier this week, we spoke about the rough quarter that the American banks had, now the most important bank in the UK comes into focus.

In February, HSBC announced that it plans to cut costs by $4.5 billion by 2022. The restructuring implies, among other things, a cut of 35,000 jobs. Due to the pandemic, the plan has been put on hold, as the bank didn’t want to leave its employees without a job. 

At its peak, the bank employed more than 300,000 people, but since the 2008 financial crisis, tables have turned, and it had sold businesses and exited some countries like Brazil in 2016. During this challenging period, HSBC had a 50% profit loss. It forecasted that bad loans could be up to $3 billion because people cannot repay during the crisis.

Now, that the world slowly falls into place, the bank will resume its initial plan. In a memo sent by CEO Noel Quinn, the bank will try to find some other jobs for some of its future former employees, but also many people will become redundant.

Over time, HSBC has been part of some controversies. In 2012 the bank had to pay $1.9 billion to regulators because of inadequate money-laundering controls. On top of that, earlier this month, Mike Pompeo, the US Secretary, called it out for supporting China’s decision to impose a security law in Hong Kong. Moreover, it is reliant on the US's ability to bank in dollars. Although the bank is now based in the UK, it was formed in 1865 in Hong Kong. 

HSBC stock fell 27% since March. The market ignored what it seems to be old new, but reacted to the Bank of England’s decision on policy - UK100 lost 0.5%.

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Sources: bbc.com, reuters.com


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This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided.