HSBC to cut 3,000 jobs in Hong Kong

Updated: 2011-09-08 07:44

(HK Edition)

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 HSBC to cut 3,000 jobs in Hong Kong

The HSBC logo is displayed outside a branch in Hong Kong. The lender plans to cut redundant jobs in the city, which would mainly involve back-offi ce managerial positions. JEROME Favre / Bloomberg

Move over 3 yrs part of global cost-saving plan: Peter Wong

HSBC Holdings Plc plans to cut around 3,000 jobs in Hong Kong over the next three years as part of its aggressive global cost-cutting plan, the bank's Asia-Pacific chief executive, Peter Wong, told local staff in a letter on Wednesday.

The redundancies, which are an initial estimate only, would mainly involve back-office managerial positions, Wong said.

"We will be focusing primarily on our support functions as we restructure to reduce management layers and improve efficiency," Wong said in a letter to employees seen by China Daily.

"Being an institution with various advantages, HSBC really doesn't need complex operational structures and bureaucracy, which reduces our profitability and efficiency," the chief executive said in the letter.

HSBC's job cuts in Hong Kong are part of its global strategic reorganization, so "nothing is surprising", said Steven Chan, a banking sector analyst at MF Global Hong Kong.

The move came after the group's Chief Executive Stuart Gulliver announced plans to cut annual costs by $3.5 billion last month.

The bank had cut 5,000 jobs after restructuring operations in Latin America, the United States, Britain, France and the Middle East and it would cut another 25,000 between now and the end of 2013, Gulliver said last month. The total redundancies will account for around 10 percent of the bank's total employees globally.

Hong Kong is among the five markets that will pioneer its operational restructuring moves, with the other markets being Brazil, Canada, Mexico and the United States, Wong said.

Explaining the job-cutting move, Wong said the group's global cost-efficiency ratio (CER) stands at 57.5 percent currently, lagging behind its target of achieving a 48-52 percent ratio by 2013.

While the CER of the lender's Hong Kong operation is lower than the group level, "we still have room to reduce bureaucracy and lift efficiency," he added.

Commenting on HSBC's job cut plan, Secretary for Financial Services and the Treasury K.C. Chan said he hopes the bank would minimize the impact of its reorganization on Hong Kong.

HSBC's restructuring will also see the lender retreat from 20 countries such as Poland, Russia and the United States, where it lacks scale and has been struggling to compete.

Separately, HSBC said it will leave Georgia's banking market by early next year after carrying out a strategic review. "In Georgia we have limited size and scale," Guy Lewis, chief executive officer of HSBC Bank Georgia, said in a statement.

China Daily - Bloomberg

(HK Edition 09/08/2011 page2)