HSBC gearing up for thousands more job cuts

PanARMENIAN.Net - HSBC is gearing up for thousands more job cuts, with Europe's biggest bank by market value set to outline the next stage in its strategic overhaul at an investor day in two months' time, cnbc.com reports.

"There is no fantastical new strategy out there," said one person familiar with the bank's planning. "But there's still huge potential to be more efficient."

Stuart Gulliver, HSBC's chief executive, said when he announced annual results last week that he would "fixate on costs" over the coming year and promised to find a further $1 billion of annual savings in 2013.

The job cuts target has still to be fixed but people close to the bank suggested up to 5,000 staff could go as part of the $1 billion savings plan. If HSBC maintained the recent rate of staff cuts to cost savings, the number would be closer to 10,000.

Gulliver, in charge since early 2011, has spent the past two years trying to streamline HSBC's global network of fiefdoms, both in order to impose more control from head office in London and to strip out overlaps and inefficiencies.

HSBC has already exceeded its target of finding $2.5-$3.5 billion of cost savings by 2013, announcing $3.6 billion of "sustainable annual savings" with its 2012 results. But the bank remains as far as ever from a related target - to cut the bank's elevated cost-income ratio to between 48 and 52 per cent.

The new job cuts will come in addition to a sharp reduction of staff numbers - from 302,000 to 260,000 - over the past two years. About 10,000 of the headcount reduction so far has been the result of divestment, with the rest due to cuts.

But according to people involved in planning the investor day, the tally of cuts could be more dramatic still if Gulliver presses ahead with plans to uproot HSBC's tradition of in-house software development.

The number of staff working in that area is already estimated to have been trimmed from 27,000 to about 21,000. But many more are likely to go as the bank shifts towards an outsourcing approach.

Bankers said contraction was likely to be gradual and would be offset to an extent by the creation of new jobs as HSBC pushes aggressively into new technology areas, such as mobile banking.