HSBC joins the list of banks going through major global overhauls, which will lead to the bank cutting 50,000 jobs.
As the bank looks to refocus its resources — which means cutting $5 billion of annual overhead costs by 2017 — The Wall Street Journal reported that the bank will turn its attention toward Asia. HSBC is also cutting down its investment bank, leaving the Turkey market and tuning down its efforts in Brazil. Its latest announcement will also reduce its employees by about 19 percent.
In the WSJ‘s account of the news, it cited unnamed investors who said the plans weren’t big enough. One investor went as far as stating that the bank has “missed the potential to be a bit more radical,” saying that the bank has overextended itself without being able to deliver.
But HSBC CEO Stuart Gulliver backed the strategic plans in play to overhaul the bank. He also acknowledged that the bank must boost its U.S.-based businesses. Additionally, he noted that continuing on with the bank’s plans to grow globally in specific regions was the best move in terms of cost savings.
As for the cuts, it will most likely reduce its employee base by about 25,000 at first, followed by another 22,000–25,000 in the next two years. This included investing more in technology to find cost savings, which has been a common bank trend as more look to increase efficiency with computers instead of actual people.
“We recognize that the world has changed, and we need to change with it,” Gulliver told WSJ. “I am confident that our actions will allow us to capture expected future growth opportunities and deliver further value to shareholders.”
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