HSBC Postpones 35,000 Jobs Slash Plan During the Epidemic
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HSBC has postponed plans to slash 35,000 jobs, saying that, during the coronavirus epidemic, it does not want to leave workers unable to find employment elsewhere. In February the bank announced the cuts as part of a major cost-cutting plan. But boss Noel Quinn said that despite the extraordinary circumstances, the “vast majority” of redundancies will now be put on hold.
It came as HSBC announced a 50 per cent decline in pandemic-related earnings. Pre-tax earnings were in at $3.2bn (£2.6bn) for the first three months, down from $6.2bn a year earlier. The bank predicted bad loans would grow to $3bn because borrowers couldn’t repay them during the recession. The earnings were also likely to continue under pressure, it said.
Earlier this year, HSBC said it intended to scale down its headcount over the next three years from 235,000 to about 200,000. The step is part of a restructuring plan which aimed at achieving cost cuts of $4.5bn (£3.6bn) by 2022. Simon French, Panmure Gordon’s chief economist, told Today’s program of the BBC that the proposal to postpone job losses would trigger mixed feelings.
Separately, HSBC chief executive Noel Quinn said in a letter to staff earlier this month. He would donate a quarter of his basic salary, around £160,000, to charity for the next six months. He still won’t take his annual cash bonus, which will be up to £1.2 m.
Chief Financial Officer Ewen Stevenson said that he would take similar steps. It contributes £93,000 and forgiving £706,000. Chairman Mark Tucker will contribute around £1.5 m to charity for his entire 2020 fee. It came as senior managers and board members decided to give up their bonuses. It is for this year at other big UK banks including RBS and Lloyds. The announcements have been in response to Bank of England calls to curb rewards during the pandemic.