HSBC is resuming a redundancy plan it put on ice after the coronavirus outbreak, and will cut around 35,000 jobs over the medium term, a memo on Wednesday revealed.
The bank will also maintain a freeze on almost all external recruitment, Chief Executive Noel Quinn said in the memo, which was sent to HSBC’s 235,000 staff worldwide.
“We could not pause the job losses indefinitely – it was always a question of ‘not if, but when’,” Quinn said, adding that the measures first announced by HSBC in February were “even more necessary today”.
A bank spokeswoman confirmed the contents of the memo.
HSBC had postponed the job cuts, part of a wider restructuring to cut $4.5 billion in costs, in March saying the extraordinary circumstances of the coronavirus pandemic meant it would be wrong to push staff out.
Quinn said it now has to resume the programme as profits fall and economic forecasts point to a challenging time ahead, adding that he had asked senior executives to look at ways to cut more costs in the second half of the year.
The bulk of the job losses are likely to fall in back office roles in HSBC’s Global Banking and Markets division, which houses its investment banking and trading businesses, a senior HSBC executive familiar with the plans said.
HSBC sees natural attrition of up to 25,000 roles each year but redeploying all affected staff to those roles was unrealistic, the executive said.
Shares in HSBC have fallen 27% since the start of March, with the pandemic prompting it to set aside $3 billion in bad loan provisions in its first quarter earnings.
Under the initial plan, HSBC said it would merge its private banking and wealth business, pare back its European equity business and reduce its U.S. retail network.
Shares in Europe’s biggest bank, which has come under fire from lawmakers on both sides of the Atlantic for its support for a new security law in Hong Kong, rose by 0.5% in London on Wednesday.