The bank expects to reduce the number of employees to as few as 240,000 over the next three years.
HSBC to cut 14,000 jobs as part of $3bn savings plan
HSBC Holdings, Europe's largest bank, will eliminate as many as 14,000 jobs as its chief executive Stuart Gulliver set out plans to cut an additional $3 billion of costs as he tries to revive profitability.
The bank expects to reduce the number of employees to as few as 240,000 over the next three years, Mr Gulliver told reporters on a conference call today as he updated investors on his strategy for the London-based lender. HSBC had already announced plans to reduce headcount to about 254,000.
Mr Gulliver, 54, is focusing on reducing costs, selling assets and expanding in faster-growing markets as he struggles to boost revenue that's been crimped by the sovereign debt crisis in Europe. He's already eliminated more than $4 billion of annual expenses, beating his initial target, and cut 46,000 jobs since he took over in 2011.
"The additional cost savings is the biggest surprise - that may imply more disposals or staff layoffs," said Steven Chan, a Hong Kong-based analyst at Citic Securities International Co, who has a buy recommendation on the stock. "The shares will continue to climb because they are now moving from a slow growth phase to a stronger growth phase."
The shares fell 3.1 pence, or 0.4 per cent, to 743.3 pence in morning trading in London. HSBC has gained 15 per cent this year in London trading.
While HSBC has met its cost savings target, it hasn't met its goal to reduce costs as a percentage of revenue because income hasn't grown, Mr Gulliver said today.
"After we set the target the euro zone crisis started," he said. The failure to meet the target "comes from the revenue side, rather than the cost side," he added.
The bank will seek to reduce costs to about 55 per cent of revenue in 2014-2016, HSBC said. That compares with a target of 48 per cent to 52 per cent for the previous three-year period.
The bank estimates it will have between 240,000 and 250,000 employees over the next three-year period. Since taking over, Mr Gulliver has reduced the number employed to 260,000. The employee count will fall to 254,000 as previously announced job cuts and disposals are implemented, he said last week.
The additional job cuts will be global and not focused on any particular area of the business, Mr Gulliver said.
HSBC, which had a common equity Tier 1 ratio of 10.1 per cent in the first quarter, will seek to keep that gauge at more than 10 per cent for the next three years. That compares with a target of 9.5 per cent to 10.5 per cent previously.