HSBC is planning to slash around 35,000 staff over the medium term to reduce the financial effect due to the prolonged COVID-19 outbreak, the bank mentioned in an internal memo sent to its global workforce.
Reported by Reuters on Wednesday, this came as the bank’s redundancy plan to cut down on the operational cost.
The London-headquartered lender has also decided to maintain a freeze on all external recruitments, the memo signed by the bank’s CEO Noel Quinn added.
Need for the hour
This memo came after the banking giant delayed job cuts in March saying that the time would be inappropriate to show its staff an exit door. These were a part of the company’s attempt for a wider restructuring to save $4.5 billion in operational costs.
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According to the restructuring plan proposed in February, the lender would merge its private banking and wealth business, cut back its European equity business, and reduce its US retail network.
“We could not pause the job losses indefinitely – it was always a question of ‘not if, but when,” the memo noted. “The reality is that the measures and the change we announced in February are even more necessary today.”
The recent decision is prompted as the profits of the bank fall sharply along with economic forecasts indication challenging time in the near future. The CEO has also asked the senior executives to look measure for cost cuttings in the second half of the year.
In the stock exchange, the bank is also witnessing a declining public demand for its shares. Since March its share prices went down by 27 percent. The endemic hit economy also forced the bank to set aside $3 billion in bad loan provisions in its first-quarter earnings.