HSBC plans new round of investment bank job cuts next week, starting in Asia: Sources

LONDON - HSBC Holdings is kicking off a fresh round of job cuts at its investment bank as new chief executive Georges Elhedery continues his overhaul of Europe’s biggest lender, according to people familiar with the matter.

The latest round of cuts will start in Asia but will ultimately affect employees globally, said the people, who asked not to be identified discussing private matters. It is not clear how many will be affected by the moves.

Some cuts are already under way in the firm’s markets division but wider layoffs across the investment bank will begin as early as Feb 17, the people said.

The dismissals will be staggered over several weeks and months, one of the people said, adding that staff will be let go based on performance as well as to remove duplication of jobs or to simplify operations.

“As announced in October 2024, HSBC is focused on increasing leadership and market share in the areas where it has a clear competitive advantage and where it has the greatest opportunities to grow,” a spokesperson for HSBC said in an e-mail response to a Bloomberg inquiry.

Mr Elhedery is seeking to reduce costs with a restructuring that has so far included combining the commercial banking division with its global banking and markets unit and pulling out of some underwriting and advisory businesses in Europe and the Americas.

Since taking charge in September,

Mr Elhedery has already cut the size of his own group executive committee

by about a third. Reductions among senior staff were expected to affect a little over 40 per cent of the company’s top 175 managers, Bloomberg reported in December. The bank said it expects to complete the moves by June.

HSBC said it will provide more clarity on the scale of the restructuring when it reports its full-year results on Feb 19. The Financial Times reported on Feb 13 that the lender is preparing to report US$1.5 billion of annual cost savings from the changes implemented under its broad restructuring initiatives.

The bank is forecast by analysts to post pre-tax profit of US$31.7 billion (S$42.6 billion) for 2024, a 4.6 per cent increase from the previous year.

The British bank’s abrupt retrenchment from equity underwriting and advisory services outside its core markets of Asia and the Middle East has rattled dealmakers in Asia over the past several weeks. 

HSBC bankers have been sending a flurry of resumes to headhunters and rivals, people familiar with the matter said. They are concerned that HSBC may lose some businesses such as cross-border mergers and acquisitions advisory from Asia to Europe and the US, and it would be difficult to get a lead role on US listings of Chinese companies.

At a town hall late last week, veteran dealmaker Matthew Ginsburg sought to calm concerns among senior bankers in Asia. A key takeaway from the call was that the region is a key focus for Europe’s biggest bank, but it would be impacted by changes, people familiar with the matter said.

Management has been trying to boost staff morale by explaining that HSBC will become more of a boutique dealmaker with a massive balance sheet, the people said. The lender has strong corporate and institutional bankers with access to large companies in the West who will help pitch for mandates when these companies do deals in Asia and the Middle East, they said. BLOOMBERG