HSBC to shed 1,149 UK jobs in new round of cutbacks

Reuters: HSBC is cutting 1,149 jobs in Britain in another round of redundancies to save money and slim down Europe’s biggest bank.

The cuts are part of a three-year revival plan designed by Chief Executive Stuart Gulliver to reduce costs, raise returns and focus on profitable areas. But Unite, Britain’s biggest trade union, said it may ballot its members at the bank to see if they want to strike in protest at the latest job cuts and accused HSBC of “putting profits before people”.

Banks across the world are shedding thousands of staff to try to increase profitability, improve technology and cope with tougher regulations brought in after the financial crisis.

In Britain banks have also axed thousands of jobs in response to new rules on how they sell investment products to retail customers, and HSBC said its latest cuts reflected this changing nature of customer behaviour and regulation.

The bank said as a result of these changes its customers will have a single advisor for both their banking and wealth management needs and while 3,166 UK jobs would be affected by the plans the bank expects to redeploy 2,017 staff.

The net loss in jobs adds to 2,200 UK job cuts made a year ago. The bank employs just over 47,000 staff in Britain, or about 40,000 excluding its investment bank and head office. The latest cuts will mostly come from wealth management, where HSBC said it is shifting advisors into its consumer retail banking business from June. Some 942 relationship management roles will go, including commercial banking financial advisor positions.

Staff will also be affected in support roles and commercial banking.

Gulliver has cut 34,500 global jobs since taking over in early 2011, or 12% of staff, which has slashed annual costs by $3.6 billion.

He is expected to say next month he is targeting another $1 billion of annual savings, which could result in another 5,000 redundancies this year, analysts estimated.

Gulliver has axed jobs across North America, Latin America, Europe and Asia-Pacific, excluding Hong Kong. He said he expected to shed 30,000 jobs by taking out bureaucracy and underperforming businesses when he laid out a three-year revival plan in May 2011, but said he also wanted to add 15,000 in faster growing areas.

Although he has surpassed his target to slice $3.5 billion off annual expenses, costs accounted for 62.8% of income last year, well above another target to get that ratio below 52%.

HSBC said it would support staff who do not currently give financial advice to take the diploma they would need to become a wealth adviser, although Unite said it is a tough qualification that about a quarter of people fail after two attempts.

“HSBC is making staff suffer in the search for ever greater profits. The bank’s behaviour is a disgrace,” said union officer Dominic Hook.

Hook said it followed other moves to cut pensions, holidays and sick pay. “Staff are at the end of their tether and we will be asking them in due course if they are prepared to take part in a strike ballot to oppose this unprecedented attack by this very profitable bank.”

HSBC made a profit of $20.6 billion last year, down 6% on 2011.

Chairman Douglas Flint said on Monday that less affluent customers could lose access to basic financial services under the new regulatory regime for giving investment advice in Britain.

More than 80,000 banking jobs have been shed in Britain since the end of 2008. Most have come at Lloyds and Royal Bank of Scotland which have axed about 32,000 and 25,000 UK jobs respectively.

Barclays’ chief executive Antony Jenkins has warned that as technology improves about 40,000 jobs could go across its operations over the long-term, or about a quarter of staff.