HSBC is to slash 35,000 jobs as part of a major overhaul of its business after seeing profits plunge by a third in 2019.
The job losses will cut across all business lines, impacting investment banking in the UK and retail distribution in the US.
HSBC’s profits before tax for 2019 dropped 33% to $13.3bn and the bank said the job cuts are part of a plan to reduce costs by $4.5bn by 2022.
The Hong Kong-headquartered bank is also warning that the Coronavirus outbreak may impact performance in 2020.
Introducing the results, interim CEO Noel Quinn said: “The Group’s 2019 performance was resilient, however parts of our business are not delivering acceptable returns. We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth. We have already begun to implement this plan, which my management team and I are committed to executing at pace.”
The shake up will see the UK investment arm downsized, with a concomitant reduction is sales, trading and equity research in Europe and the transfer of structured products to Asia.
The US business will also be repositioned as an international client-focused corporate bank with a targeted retail offering, cutting the branch network by around 30% and investing in digital and unsecured lending for high net worth clients.
The shift will entail the consolidation of middle and back offices and the reorganisation of global functions and head office to match the new structure.
The bank expects to incur restructuring costs of around $6bn and asset disposal costs of around $1.2bn during the period to 2022, with the majority of restructuring costs incurred in 2020 and 2021.