HSBC is planning to lay off at least 22,000 employees in an effort to cut costs by as much as $5 billion over the next two years, the European banking giant reportedly announced Tuesday. As part of its cost-cutting measures, and to adapt to “structural changes in the operating environment,” the bank will also sell its businesses in Brazil and Turkey.
According to Reuters, an additional 22,000 to 25,000 jobs would be lost as a result of consolidation of IT and back-office operations, and shuttering of the bank's branches globally. This could bring the total number of staff reductions to nearly 50,000. The bank employs 266,000 people worldwide.
“We recognise that the world has changed and we need to change with it,” HSBC, which is Europe’s largest bank, said, in a statement released Tuesday. The bank also said that it will aim for a return on equity of more than 10 percent by 2017, down from a previous target of 12 percent to 15 percent by 2016.
This is the second time in four years that HSBC has attempted to shrink its global workforce. Between 2011 and 2013, the bank reportedly cut over 40,000 jobs under the leadership of CEO Stuart Gulliver, to reduce annual expenses and revive profitability.
In addition to the latest job cuts, the bank also announced measures to shrink its risk-weighted assets by about $290 billion and to accelerate its investments in Asia, including in “both the Pearl River Delta in Guangdong province, China, and in the Asean region.”
HSBC also confirmed that it was currently reviewing whether to move its headquarters out of the U.K. -- a process that would be completed by the end of 2015.
“Overall, the statement is what we expected: an opportunity missed to restore investor confidence. HSBC may be shrinking slowly but it remains one of the world's most complex banks,” Jim Antos, an analyst at Mizuho Securities Asia Ltd. in Hong Kong, told Reuters.
HSBC’s shares on the Hong Kong stock exchange were trading up 0.75 percent, losing ground after being up 1.2 percent following the announcement.