Cull of more than 500 jobs could begin in weeks, people say.
HSBC
Holdings Plc is considering eliminating hundreds of investment
banking
jobs as Chief Executive Officer John Flint pressures the lender’s
top managers to cut costs, according to people familiar with the
plan.
At
least 500 jobs could go within global banking and markets, although
formal numbers have not been communicated, said the people who asked
not to be named. Greg Guyett, who recently took sole control of
global banking, will be pushing through cuts in his part of the
business, one person said.
The
reductions are expected to begin at the unit as soon as mid-June and
will take place over the year, the people said. They are part of
wider job reductions across the lender, and mark the latest stage of
HSBC’s “Project Oak” revamp.
“Business
and function lines constantly re-evaluate their needs to ensure they
have the right roles in the right locations,” HSBC said in a
statement.
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Shares
in the bank jumped to an intraday high after the news and were
trading down 0.1% at 2:10 p.m. in London.
Flint
has made “positive jaws” -- banking jargon for keeping the top
line growing faster than expenses -- a key focus as he seeks to put
his stamp on the bank, which makes the bulk of its revenue in Asia.
The CEO berated his most senior managers in March for missing cost
targets, people with knowledge of the matter have said.
The
unit known as GBM houses the lender’s corporate finance and trading
operations, employing about 24,000 of the division’s total
workforce of 48,500 which includes contractors and other support
staff.
Project
Oak
Project
Oak’s job reductions should help the company’s goal of achieving
positive jaws, as the cost incurred can be accounted for as a one-off
item rather than counting toward HSBC’s overall cost base, one of
the people said. That’s a deliberate strategy to encourage
aggressive reductions, as managers may have resisted making necessary
cuts in the past to avoid the hit to their own budgets from costs
such as severance payments, the person said.
HSBC
missed a full-year target to achieve an increase in revenues that
outpaced the increase in costs. That stepped up the pressure on
Flint, who attacked “incompetence” at a Hong Kong event in March
attended by about 400 managers, people with knowledge of the event
said earlier this year. The bank met its positive jaws target in
first-quarter numbers published this month.
