HSBC has restarted its plans to cut 35,000 jobs around the world, after pausing the redundancies as the coronavirus pandemic worsened.
The UK-listed bank had initially announced the plan to cut about 15% of its 235,000-strong workforce in February but put the process on hold in March because it did not want to leave workers unable to find new work during the various lockdowns.
The bank’s interim chief executive, Noel Quinn, wants to cut costs by £3.5bn, with the aim of increasing profitability as the lender chases opportunities in Asia. Almost half of HSBC’s 2019 revenues came from Asia, compared to only 29% in Europe.
Quinn had previously said there would be “meaningful” cuts in the UK. The main focus is expected to be head office operations as well as its global bank and markets business, which are largely London based.
The coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections.
While the government’s job retention scheme has so far protected millions of jobs, fears are mounting that unemployment will rise as the scheme begins to be phased out from August.
Since lockdown began on 23 March, some of the UK’s largest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK.
Rolls-Royce - 9,000 jobs
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. In May Rolls-Royce said it would make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire, and 175 in Solihull, Warwickshire.
BP- 10,000 jobs
The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said that the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.
Centrica- 5,000 jobs
The owner of British Gas announced in June that it intends to cut 5,000 jobs, mostly senior roles, and remove three layers of management, in a bid to simplify the structure of its business. The energy firm has a total workforce of 27,000, of whom 20,000 are in the UK.
Bentley- 1,000 jobs
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe in Cheshire.
Aston Martin Lagonda – 500 jobs
The Warwickshire-based luxury car manufacturer has announced 500 redundancies.
British Airways - 12,000 jobs
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.
EasyJet – 4,500 jobs
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.
Ryanair – 3,000 jobs
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.
Aer Lingus – 900 jobs
The Irish airline, part of International Airlines Group (IAG) plans to cut 900 jobs.
P&O Ferries – 1,100 jobs
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.
JCB – 950 jobs
Digger maker JCB said in May up to 950 jobs are at risk after demand for its machines halved due to the coronavirus shutdown.
Ovo Energy – 2,600 jobs
Britain’s second biggest energy supplier announced in May it planned to cut 2,600 jobs and close offices after the lockdown saw more of its customer service move online.
Johnson Matthey – 2,500 jobs
The chemicals company said in June it is planning to make 2,500 redundancies worldwide over the next three years. The move will affect 17% of the workforce at the firm, which is a major supplier of material for catalytic converters.
Bombardier – 600 jobs
The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.
The Restaurant Group – 1,500 jobs
The owner of Tex-Mex dining chain Chiquito, and other brands including Wagamama and Frankie & Benny’s, said in March that most branches of Chiquito and all 11 of its Food & Fuel pubs would not reopen after the lockdown, leading to the loss of 1,500 jobs.
Monsoon Accessorize – 345 jobs
The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal which saw 35 stores close permanently and led to the loss of 545 jobs.
Clarks – 900 jobs
Clarks plans to cut 900 office jobs worldwide as part of a wider turnaround strategy
Oasis and Warehouse – 1,800 jobs
The fashion brands were bought out of administration by restructuring firm Hilco in April, in a deal which led to the permanently closure of all of their stores and the loss of more than 1,800 jobs.
Debenhams – 4,000 jobs
At least 4,000 jobs will be lost at Debenhams as a result of restructuring, following its collapse into administration in April, for the second time in a year.
Mulberry – 470 jobs
The luxury fashion and accessories brand said in June it is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.
Jaguar Land Rover – 1,100 jobs
The car firm is to cut 1,100 contract workers at manufacturing plants the UK, potentially affecting factories at Halewood on Merseyside and Solihull and Castle Bromwich in the West Midlands.
Travis Perkins – 2,500 jobs
The builders’ merchant is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce. The company, which is behind DIY retailer Wickes and Toolstation, said the job losses will affect staff in areas including distribution, administrative roles and sales. The move will also affect staff across 165 stores that are now earmarked for closure.
HSBC has not said what the impact will be on its UK branch network. In February it said the closure of 27 branches this year was not related to the restructuring plan but was a reflection of their declining use by customers.
Quinn wrote to staff on Tuesday warning of “challenging times ahead” and said the job cuts were “even more necessary” because of the impact of the pandemic on the bank’s profits, which halved in the first quarter.
Profitability for 2020 was expected to be “materially lower” than 2019 despite the cost cutting, the bank said in April. Loan losses could reach $11bn (£8.8bn) this year, it said. Expected credit losses ballooned by $2.4bn in the first three months of 2020 as the pandemic hit Asia and then Europe.
HSBC has cancelled its dividend for the year after the Bank of England pressured the British banking sector to preserve cash to see it through the crisis and an expected deep recession. However, the Bank of England has expressed confidence that lenders have enough capital to continue lending to businesses and consumers.
“I wish I could say that the next few months will see a return to normality but that is unlikely to be the case,” Quinn wrote in a memo sent to all staff. “We could not pause the job losses indefinitely – it was always a question of ‘not if but when’.”
The majority of staff would be employed or paid for most of 2020, but executives would look to make the cuts during the second half of the year, Quinn wrote. The bank would extend a freeze on external recruitment in the hope that it could find new roles for some of the workers whose jobs would be made redundant, he added.
Unite, one of the unions representing workers in the bank’s UK branches, said it would oppose all compulsory redundancies.
Dominic Hook, Unite’s national officer, said: “The question that must be asked today is ‘why now, HSBC?’ At present, vast numbers of HSBC staff are making massive sacrifices working from home or taking risks travelling into offices and bank branches to help customers. Why now?”
HSBC has also faced criticism this month after it and rival Standard Chartered both publicly endorsed China’s imposition of a new security law in Hong Kong. Both banks are London-listed but focused on Asia. The US secretary of state, Mike Pompeo, accused the company of a “corporate kowtow”.
The backing for the law also prompted anger from the Labour party and prominent investors. Shadow foreign secretary Lisa Nandy and shadow chancellor Anneliese Dodds said they had profound concerns that HSBC’s move could undermine the rights of citizens of Hong Kong, the territory in which the bank was founded. Aviva Investors, a large UK shareholder, also expressed unease.
HSBC and other UK banks also face the prospect of the UK’s trading relationship with the EU defaulting to World Trade Organization terms at the end of 2020. The bank said this was a “prolonged period of uncertainty, unstable economic conditions and market volatility”.