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HSBC Layoffs

August 1, 2011 by staff 

HSBC LayoffsHSBC Layoffs, British banking group HSBC said Monday it will cut 30,000 jobs worldwide in 2013 and sold almost half its retail banking branches in the U.S., part of a new strategy to focus on fast growing emerging markets.
The bank, which reported a larger increase than expected 3 percent in earnings before taxes and $ 11.5 million in the six months to June, has already cut 5,000 jobs this year. Another 25,000 were reduced in 2013, spokesman Patrick Humphris said.

HSBC currently employs some 296,000 people around the world. Humphris declined to give details of where the job cuts would be, but said the group remains the recruitment of emerging economies like Brazil and Mexico.

The move echoes similar announcements from other international banks, including Credit Suisse, UBS and Goldman Sachs, which in recent weeks said they had to cut payroll to adapt to market conditions more difficult.

As part of its restructuring, HSBC will sell 195 retail banking branches in the United States for First Niagara Bank and around 1 billion. Most of the branches sold in the state of New York, while six are in Connecticut. Four more are in northern Westchester County and two in Putnam County.

The bank is still struggling with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition will be HSBC’s largest subprime lender in the United States at the time, resulting in billions of losses for HSBC leading to the 2008 financial crisis.

“I am very happy with the results, which marks a first step in the right direction on what will be a long journey,” said new chief executive Stuart Gulliver in a statement.

News of bank reform and profits – earnings per share rose to 51 cents in the first half of 38 cents a year earlier, allowing a dividend increase of 12.5 per cent to 18 cents – the price of increased shares of the company.

By midday in London, shares in HSBC Holdings PLC rose 4.4 percent to 619.40 pence (10,17).

Seymour Pierceanlyst Bruce Packard said profit before tax figures were 6 percent more than expected.

“These results are better than expected, underlining the appeal of conservative HSBC stock market development and business,” he said.

Gulliver, said in a statement it expects the world’s financial markets remain volatile this year and into 2012. He predicted that growth in the U.S. and Europe will remain sluggish, affected by high levels of debt and government budget cuts, but Asia-Pacific and Latin America continue to grow.

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