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HSBC axes 6,000 jobs so far this year as cost cutting accelerates

Pedestrians walk past a HSBC UK bank branch in central London. Photo: Tolga Akmen/AFP via Getty Images

HSBC (HSBA.L) has cut 6,000 staff since announcing its sweeping restructure plan earlier this year.

Finance chief Ewen Stevenson told journalists on Tuesday that around 6,000 full-time employees and contractors had left the bank so far this year. HSBC is on track to reduce global headcount by 10,000 come year end, he said.

HSBC announced plans to cut 35,000 of its 235,000 global staff in February as part of a sweeping overhaul intended to boost the bank’s performance. Chief executive Noel Quinn said those plans were “on track” and said management were looking at ways to go even further.

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“We are accelerating the transformation of the group, moving our focus from interest-rate sensitive business lines towards fee-generating businesses, and further reducing our operating costs,” Quinn said in a statement alongside third quarter results.

HSBC will cut costs by more than the $4.5bn guided earlier this year, the bank said. Risk weighted assets will also be reduced by more than previously forecast.

The bank said it would provide full details on the new, more aggressive restructure plan in February, alongside its annual results. Plans are still being finalised.

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Stevenson and Quinn wouldn’t say whether the new plans would involve more job cuts.

“We’re not targeting a headcount reduction number, we’re targeting a cost reduction number,” Stevenson said on an earnings call with media.

“With good planning and head count management, we can manage a significant amount of head count reduction through natural attrition.”

The bulk of HSBC’s cuts will fall in the US and Europe, which are underperforming regions where interest rates are low and competition is tough. The outlook for these regions has worsened significantly since February due to the COVID-19 crisis.

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Even as HSBC cuts back in some markets, it is doubling down on Asia. Quinn said HSBC was investing aggressively in growth areas such as wealth management in China, trade finance in the Greater Bay area, and sustainable finance across Asia.

“From a revenue growth point of view, it’s fair to say we see higher levels of revenue growth available to us in Asia than we currently do in the UK market because Asia is coming out of the COVID crisis faster than the rest of the world,” he said.

Quinn said Europe remained “extremely important” to HSBC. The bank continues to invest in its UK business even as attention and assets shifted eastwards. HSBC is not considering reviewing its UK domicile status, he said.

The comments came as HSBC reported forecast-beating third quarter results and promised to resume a dividend if regulators agreed to allow it. Shares topped the FTSE 100 (^FTSE).

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