Welcome to Brand of the Day, where we pick the company making headlines for the day and explain five elements you need to know about what has happened for them to be in the news.
Today we feature HSBC, a UK-based bank with a global presence that has decided to shed costs by shedding tens of thousands of jobs.
1) The bank
HSBC, headquartered in London, though founded in Hong Kong, is one of the world’s largest bank in terms of its assets. It operates almost 7,000 offices in 73 countries worldwide and services approximately 60 million customers.
2) The old cuts
The bank first tried its hand at major cost-cutting between 2011 and 2014. During this time, it cut almost 40,000 jobs. However, the move did not save as much as was hoped because regulatory compliance costs have risen rapidly since then.
3) The dead weight
The first move in this year’s cost-cutting tactic is to shed its businesses in Brazil and Turkey, which haven’t been performing very well. This alone, would remove about 10 per cent of the total workforce, or 25,000 jobs.
4) The new cuts
In addition to leaving Brazil and Turkey, HSBC plans to eliminate between 22,000 and 25,000 full time jobs worldwide. It is still unclear how these cuts will be determined.
5) The future
Moving forward, HSBC will begin focusing more on online banking, rendering many of its branches (and their operating costs) unnecessary. It will move certain operations, including the majority of software development to India and China. Overall, the bank has hinted on increasing its presence in Asia. By the end of this year, HSBC will also vote on whether or not it should return its home base to Honk Kong.