HSBC revives plan to cut 35,000 jobs after coronavirus pause

HSBC is reviving a programme of job cuts it put on hold three months ago as the bank grappled with the coronavirus crisis, pressing ahead with a broad overhaul that will include 35,000 job losses.

Noel Quinn, chief executive, said in a memo on Wednesday seen by the Financial Times that the decision to resume the planned redundancies, paused in March, was prompted by a fall in profits in the first quarter and grim economic forecasts. He said the bank would also extend a freeze on external recruitment.

“The reality is that the measures and the change we announced in February are even more necessary today,” Mr Quinn said. “We could not pause the job losses indefinitely — it was always a question of ‘not if, but when’.”

HSBC confirmed the contents of the memo but declined to comment further.

The bank unveiled the restructuring plan in February, when it said it aimed to shed 35,000 jobs during the next three years and cut annual costs by $4.5bn — one of the biggest revamps in its history. A month later, with the global jobs market decimated by the public health crisis, HSBC said it would delay the redundancy part of the plan.

The Financial Times reported last month the board was pressuring executives to restart the restructure.

Mr Quinn said he expected most employees to remain employed or paid through to the end of the year but did not wish to “over-promise”. He added: “I know that this will not be welcome news and that it will create understandable concern and uncertainty.”

HSBC said it would do its best to assist those leaving the bank.

The UK-based bank has had a tough month after it caused an outcry in London and Washington when it signalled its public support for the national security law that Beijing is crafting to impose on Hong Kong.

Critics say the law, which China said was intended to combat terrorism, subversion and foreign interference, threatens Hong Kong’s freedoms and could undermine the independence of the legal system in the semi-autonomous territory.

The bank, which was founded in Hong Kong in 1865 but later moved its headquarters to London, makes more than half of its group profits in Hong Kong and another 13 per cent from mainland China.

This year a group of retail investors in Hong Kong threatened legal action after the bank cancelled its dividend for the first time in 74 years under pressure from the Bank of England as the pandemic deepened.

The news that HSBC was reviving its job cuts programme was first reported by Reuters.