HSBC Holdings Plc is making heavy considerations as to close up its US-based retail banking business. This is primarily due to the lending giant having trouble to increase its performance within the North American markets, opting to move to greener pastures altogether.
Plans Of Prioritizing The More Successful Markets
These plans aren’t officially confirmed, however. Even so, the bank’s senior managers are reported to be making plans to pitch an exit strategy to the board come next month.
The bank, headquartered in London, will keep its investment banking activities within the US, just not the retail banking part thereof. It should be noted that even this segment is planned to have a size reduction by the management, as the bank is primarily focusing on the Middle East and Asia-based institutional clients.
35,000 Job Cuts Amid Restructuring
Asia stands as the region HSBC’s present business is the strongest. The bank is also making plans to further expand its offerings within Asia to capitalize in the region it’s the strongest in.
HSBC is already in the process of restructuring its global business, with this move running in tandem with this. The process has involved a drafted plan that will lead to the unfortunate lay-off of 35,000 staff members from its global offices worldwide, however. Earlier, the bank has made plans to shed 255 jobs from its France office, with 300 UK employees facing the chopping block as well. Both of these plans stand as part of HSBC’s major restructuring plans.
Just a week ago, Micheal Yarian, the former head for HSBC’s US fixed income trading desk, parted ways with HSBC. This stands as part of the overarching restructuring plan, as well.
Cutting Out Over $10 Billion In Operational Costs
In 2019, HSBC had reported an operating cost totaling in $42.3 billion, setting a staggering target in order to reduce these costs down to below $31 billion by 2022. This was announced back in February, with the overall restructuring of HSBC being one of these measures taken to enact this plan.
The COVID-19 pandemic had affected HSBC, as well, much like it had affected almost everything else in the world. The bank had recorded a 48% reduction in profit.
People losing their jobs in this restructuring is a very unfortunate, but inevitable event. Depending on their respective situations, this will lead them to better or worse lives, with no real choice about the matter on their part. With luck, everything will turn out for the best, but the probability is small.