HSBC may cut 10,000 more employees, has a problem

HONG KONG/LONDON – Banking group HSBC Holdings Plc may cut more than 10,000 jobs as part of its plan to slash costs by up to $3.5 billion a year, Sky News reported Thursday.

New HSBC Chief Executive Stuart Gulliver in May announced a far-reaching plan to cut costs and revive flagging profits by exiting dozens of countries and refocusing on its areas of strength.

Gulliver did not say how many jobs would go as part of the cuts, but analysts expect the bank to axe thousands from its 300,000 global workforce.

Sky, citing people close to the bank, said Thursday the plans had not yet been finalized. HSBC declined to comment.

The bank could provide an update along with its half-year results Monday, although analysts said costs are likely to have remained high in the first half of this year as the restructuring is a multi-year plan.

“There was a lot of talk about streamlining going on at the last strategy day, so I suppose this is a function of that,” one top 10 HSBC shareholder told Reuters. “It is a quite sprawling bank, and I wouldn’t be surprised if it has got a bit bloated here and there,” he said.

Europe’s biggest bank faces an urgent need for action as more than two-fifths of its businesses are not delivering their cost of capital. “We clearly have a cost problem,” Gulliver said in May.

HSBC said it will also sell, shut or slim down retail operations in 39 markets, where operations are sub-scale and unprofitable and is looking to sell its U.S. credit card arm and shrink its network of 475 U.S. branches.