HSBC plans to freeze hiring, salaries to cut $5b in costs

LONDON: HSBC Holdings will impose a global hiring and pay freeze as part of its drive to cut as much as $5 billion in costs by the end of 2017.

The measures, which affect the consumer and investment banking businesses, were outlined in a memorandum received by employees on Friday, Gillian James, a spokeswoman for the bank, said on Sunday in an e-mailed statement. Europe’s largest bank, which will release full-year earnings on February 22, is mulling whether to move its headquarters away from London, partly because of the tax burden and tougher regulatory scrutiny.

“This is in line with HSBC’s moves to lower operating costs,” said Richard Cao, a Shenzhenbased analyst at Guotai Junan Securities. “HSBC can’t escape from the global economic slowdown and worsening asset quality like other global banks.”

Three-year plan

HSBC chief executive officer Stuart Gulliver, 56, in June outlined a three-year plan to pare back a sprawling global network by shutting money-losing businesses and eliminate as many as 25,000 jobs as he seeks to boost profitability. Barclays extended a freeze on hiring new staff indefinitely in December, while European lenders including Credit Suisse Group and Deutsche Bank are cutting thousands of jobs to shore up earnings.

The moves were reported earlier by Reuters.

The shares fell 1.6 per cent to 484.25 pence at 10:10am in London, extending losses this year to about 9.6 per cent.

Under its three-year plan, the London-based lender is seeking to reduce the number of full-time employees by between 22,000 and 25,000. In the UK, the bank may eliminate as many as 8,000 jobs.

As part of its focus on more profitable markets, HSBC is reviewing its operations in Lebanon and may exit the Middle Eastern country, people with knowledge of the matter said earlier this month.

The bank is closing its Indian private-banking business, people familiar with that move said in November.