StanChart to axe 1,000 senior staff in cost-cutting drive
Standard Chartered, the British-based, Asian-focused bank, said that it planned to reduce senior staff positions by 25 per cent while cutting costs and reshaping the company under its new chief executive, William T Winters.
The reduction in management is part of a plan announced by the bank in July to streamline its business, realign its management and cut costs by $1.8 billion by the end of 2017.
Winters, the former head of JPMorgan Chase’s investment bank, was brought in this year to succeed Peter Sands, the bank’s longtime chief executive, and turn around Standard Chartered, which generates most of its earnings in Asia.
The staff cuts were announced in an internal memorandum.
“Bill’s note to staff is an update on what we said we were going to do,” Standard Chartered said in a separate statement. “In it, he has made it clear that kick-starting performance is a priority, and we are not standing still.”
The company added: “On head count, we said previously (when we announced the management team and organisational changes in July) that there would be further personnel changes to come as we simplify our organisational structure. We have already acted to reduce management layers and as a result will have up to 25 per cent fewer senior staff.”
Standard Chartered’s shares rose 5 per cent to 787.60 pence, or about $12, in afternoon trading in London.
The bank is expected to cut roughly 1,000 management positions out of about 4,000, a person familiar with the lender’s plans said. The employees losing their jobs are expected to be notified by the end of November.
Standard Chartered has been hit hard by a slowdown in emerging markets, as well as by impairments for bad loans and “challenging” trading conditions in some business lines in recent quarters, including currency hedging products.
In the first half of the year, the bank’s profit declined 37 per cent as its results were hit by currency fluctuations, exits from several businesses and lower valuations on loans.
Winters became chief executive in June as part of a broad shake-up of leadership that will also lead to the departure of John W Peace, the chairman of Standard Chartered, next year.
On a conference call with reporters in August, Winters said the bank was facing “real challenges” and had a legacy of focusing “on growth over risk discipline and returns.”