HSBC Holdings PLC, Europe's largest bank, yesterday announced another round of job cuts by axing 450 front and back office employees in Hong Kong, citing worsening economy and cautious outlook for 2009.

The banking giant first trimmed its workforce in September when it cut 1,100 jobs across the world.

"In this day and age no guarantees of job security can be given. I can however assure you that the bank does not overreact to short-term factors," Peter Wong, an executive director of the bank said in a letter addressed to its Hong Kong staff.

Such decisions are always exceptionally difficult to make and are a result of organizational changes in a number of areas as well as the deteriorating economic conditions and our cautious outlook for 2009, he said.

HSBC, which set aside $4.3 billion for the US bad loans in the third quarter, said it will review and make changes in operation amid the deteriorating external economic conditions.

Hong Kong Banking Employees Association (HKBEA) expressed concern that other banks might follow suit and add more pressure to the already rising jobless rate in the city.

"Banks should have social responsibility and immediately stop laying off their employees," said Tan Kin-sun, deputy chief executive of the HKBEA. "Banks should instead re-organize their human resources."

Tan added that the situation at financial firms in the city "was not as bad as it appears to be". Axing jobs will also discourage potential job talents and college students to pursue their career in the banking sector, a growth driver in Hong Kong, he said.

In September, the bank cut 1,100 jobs, accounting for 4 percent of the bank's global wholesale banking workforce, including some 100 employees in Hong Kong.

Vincent Cheng, chairman of the British lender's Hong Kong operation, said late last week that the bank "will not rule out the possibility of further job cuts, as the economy is now facing challenges."

Singapore lender DBS bank said last week they plan to cut 6 percent of its total workforce by the end of this month. US insurance giant AIA is reportedly to lay off around 20 staff at information desk, hotline service center and other frontline employees.

Amy Yip, chief executive of DBS Bank (Hong Kong) said the lender will cut 900 jobs mainly in its Hong Kong and Singapore operations, as the impact of the global economic crisis worsens in the region.

Staff in Hong Kong's pillar sectors, including financial services, exports, retail consumption and property, accounts for 56 percent of the city's working population, according to government statistics, while output from these four sectors contributes over 56 percent of the city's gross domestic product.

Globally, banks have cut about 150,000 jobs since the credit crunch began with $958 billion in credit losses on subprime mortgages.

(HK Edition 11/18/2008 page2)