|Staff Reporter |||Mar 27, 2020 05:35 PM EDT|
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British investment bank HSBC Holdings will be holding off its previously announced business overhaul due to the "extraordinary impact" of the viral outbreak. The bank originally announced its restructuring plan in February; a plan that would include massive job cuts and other cost-cutting measures.
The multinational bank, which is one of the three lenders in Hong Kong that is authorized to issue currency, mentioned to staff members of Thursday that it would be temporarily holding off its restricting plan.
According to a previously published memorandum, HSBC is planning to remove the vast majority of redundant positions within its business. This is estimated to affects about 35,000 jobs, resulting in a reduction of annual costs of up to $4.5 billion.
To ensure the security of its workers during these trying times, HSBC stated that it will be freezing all of its hiring operations, except for business-critical and frontline positions.
HSBC chief executive Noel Quinn mentioned in an internal memo that the restructuring plan will still be implemented when the crisis is over and it will be crucial to transform the business. He added that the decision to postpone the implementation of the overhaul was made to support its current staff given the present uncertainties caused by the viral outbreak.
Quinn was permanently appointed as the bank's head last week. He took over former CEO John Flint and became the company's interim CEO in August last year. Immediately after he took the position, Quinn announced a series of overhauls, including a massive staffing overhaul for its Asian business.
The London-based company generates a majority of its revenues in Asia, with a good portion of its operations located in the region. Part of its long-term strategy involved taking advantage of the rising incomes of people in China and Southeast Asia, particularly in cities located in the Greater Bay Area.
HSBC previously revealed that it plans to shift a portion of its capital from its underperforming business in the United States and Europe to other rapidly growing markets. Some analysts predict that HSBC could be reducing its workforce in less-profitable markets and then shifting its focus on building its business elsewhere.
Sources with knowledge of the matter revealed that HSBC plans to cut its retail branches in the US by as much as 30 percent, while also reducing its investment banking business in Europe. Similar to other banks, HSBC's global business has been greatly affected by the ongoing viral outbreak. The global lockdowns have greatly reduced business activities around the world, negatively affecting the bank's operations.
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