HSBC will sell its businesses in Brazil and Turkey, reducing
headcount by 25,000. In addition, another 22,000 to 25,000 job cuts are
planned across the bank, which should reduce the total number of
employees to roughly 208,000. As part of a previous effort to cut costs,
HSBC axed nearly 40,000 jobs between 2011 and 2014.
HSBC (HSBC)
also announced that it will emphasize online banking and self-service,
allowing the bank to shutter 12% of its branches. Some of the bank's
operations will be be moved to low-cost locations, and 75% of its
software development will now be done in China and India.
"Since the start of 2011, we have materially reshaped HSBC, but it's
also very clear that this has been insufficient to drive a revaluation
of the firm and a higher share price," CEO Stuart Gulliver said.
HSBC shares initially jumped more than 1% in Hong Kong as investors
reacted to the announcement, before sinking back in London trading.
"We recognize that the world has changed and we need to change with
it," Gulliver said, emphasizing HSBC's plans to expand operations in
Asia, especially in asset management and insurance.
The bank is
expected to reveal more details during a conference call with investors
on Tuesday. In addition to more information on job cuts and cost
savings, investors will be looking for clues as to whether HSBC will
move its headquarters.
The company is conducting a review, to
be completed by the end of 2015, on whether it should relocate out of
London. The bank's previous home, Hong Kong, is the most logical choice
for a move.
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