The banking sector continues to suffer drastic layoffs as the global economic outlook remains uncertain. The latest financial institution reported to be set for cutting a massive amount of workers is HSBC, which has already announced firing thousands of people just a few weeks ago.
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HSBC to Cut High-Paying Jobs in Europe
London-headquartered multinational investment bank HSBC is planning to let go of up to 10,000 of its employees as a new cost-cutting measure, British media reported on Monday. The latest round of downsizing will target mostly high-paid roles and will be mainly focused on shrinking the bank’s operations in Europe.
This news comes just a few weeks after the investment bank announced the previous firing of up to 4,700 employees, about 2% of its global workforce. Those cuts were said to be focused on management roles and were in response to a bleak global outlook. They also coincided with the sudden and unexplained exit of HSBC’s former CEO.
“We’ve known for years that we need to do something about our cost base, the largest component of which is people – now we are finally grasping the nettle,” an unnamed HSBC insider told the Financial Times. “There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”
A Global Banking Industry Contraction
The new restructuring plan at HSBC is being attributed to economic uncertainty due to Brexit as well as the trade war between the U.S. and China hurting global growth. However, it can not be delinked from the historically low interest rates around the world that make it difficult for banks to profit from their traditional loans businesses. Ever since the financial crisis of 2008, investment banks have been hit with limiting regulations and major fines with regards to their trading practices.
As we recently reported, prior to the latest news from HSBC, banks have announced nearly 60,000 job cuts so far this year. The contraction in the banking sector is spread around the world but is most strongly felt in Europe. The top financial institutions by the number of job cuts are Banco Santander, Commerzbank, HSBC, Barclays, Alfa Bank, KBC, Societe Generale, Caixabank, and the National Bank of Greece, with Deutsche Bank leading the pack with 18,000 job cuts.
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