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Amid very tough business conditions and a profit plunge, HSBC has announced that it will cut 35,000 staff over the next three years. The bank also issued a warning on the impact of the novel coronavirus (COVID-19) in Asia, which makes up the bulk of its profits.
The interim chief executive, Noel Quinn, stated on 17 February that the bank plans to cut $4.5bn (HK$35bn) worth of costs, which would mean slashing around 15% of its global workforce.
“We would expect our headcount to decrease from the current level of 235,000 to be closer to 200,000 in 2022. This represents one of the deepest restructuring and simplification programmes in our history,” Quinn said.
HSBC said there had already been significant disruption for employees, suppliers and customers – particularly in mainland China and Hong Kong – and it was monitoring the situation closely, it was reported in The Guardian.
“We expect to take additional loan loss provisions as a result of the coronavirus and the weakened outlook for the Hong Kong economy. I think it’s really a call on how long does it take to contain the virus, and certainly some of the latest data has given us more optimism on that over the last week or so,” said Ewen Stevenson, the bank’s CFO.
The coronavirus outbreak is the latest challenge the London-headquartered bank has had to confront in Asia. It was also hit by more than six months of protests in Hong Kong and tensions over last year’s US-China trade war. However, Quinn said the lender remains upbeat about China, seeing it as a significant opportunity for growth despite recent disruptions.
“Absolutely, we need to deal with the coronavirus situation in the short term but we do not see that changing the long-term strategic attractiveness of China,” Quinn said.