Despite restructuring pains that will bring about the loss of 4,000 jobs, Singapore is still a strategic spot for British bank HSBC’s operations in Asia. It will also remain a key driver in the bank’s operational growth.
Streamlining its workforce by 2% is the bank’s way of dealing with the global turmoil straining many of the world’s commercial giants.
Based on its recent annual report, as of December 2018, HSBC had 235,217 employees.
Those senior in rank are the target in the latest job cut, chief financial officer Ewen Stevenson says in a first-half earnings conference call. HSBC will pay out a total of US$650 million (S$898 million) to US$700 million in severance costs, he adds.
The bank, which makes more than 80% of its profit in Asia, declined to disclose more details about the layoffs, including whether the cuts would extend to its Singapore unit.
“Singapore is one of eight strategic countries that we are investing in,” says chairman Mark Tucker in a call with the media. “We are putting focus and support to the business, and it remains key to our overall Asian and Southeast Asian ambition.
“So Singapore is very much part of the future, part of the growth of the group,” he says.
Head honcho leaving after 18 months
The bank also announced that its chief executive officer, Mr John Flint, will exit the bank after just 18 months in the job.
A Reuters report has it that Flint’s exit was precipitated by differences of opinion with the chairman over the CEO’s more tentative approach to cutting expenses and setting revenue targets for senior managers to boost profit growth.
The CEO’s departure was announced together with the bank’s half-year results on Monday as it predicts a gloomier outlook for its business. An escalation of the trade war between China and the United States, an easing monetary policy cycle, unrest in its key Hong Kong market and Brexit are hurting business.
HSBC is one of several European lenders eliminating roles in recent months.