HSBC will cut up to 255 jobs in France, or nearly 37 percent of full-time headcount in its French global banking and markets unit, by end-2021. French news daily Les Echos reported the cuts today, quoting HSBC as saying that the departures will take place on a voluntary basis, but warned of forced layoffs for “economic reasons” if there were not enough volunteers.
“Its principle would be to reallocate capital and resources to overcome the structural challenges in this business, to focus on profitable activities, reduce the cost base and thus safeguard our competitiveness,” the bank said in a statement.
The cuts came a few months after the British lender said it had put its recently-announced job cuts plan on hold in order to limit the impact of the coronavirus crisis on its staff.
Noel Quinn, HSBC’s newly-appointed chief executive, outlined plans in February to cut 35,000 jobs across the group and restructure part of its global markets business. The bank reportedly planned to cut up to 10,000 jobs in 2019, or nearly four percent of its full-time headcount as it becomes the next to succumb to the global slump in banking revenues.
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HSBC quietly held rounds of layoffs
The British bank has been laying off senior people in a bid to cut costs. It has unexpectedly parted ways with its CEO John Flint in August, less than two years after his appointment. The lender was vague over the cause of its former executive chief, saying only that the decision was “mutual” and that its board believed a change was needed to meet the challenges it faced.
The cuts anyways follow a turbulent period for HSBC. The investment bank said in March it has taken a $200 million floating loss after price of gold in New York and London has diverged by the most in four decades.
HSBC further explained that in a rare occurrence the one-day loss breached its value-at-risk limits 12 times in March due to “unprecedented widening of the gold exchange-for-physical basis, reflecting Covid-19-related challenges in gold refining and transportation, which affected HSBC’s gold leasing and financing business and other gold hedging activity”.
In addition, HSBC suffered an exodus of high-profile executives after the meltdown hit the business in financial markets, which put further pressure on the CEO to rein in costs.