HSBC, the largest bank in the UK, has plans underway to top hiring and slow down pay increases in 2016.
HSBC Imposes Global Freeze on Hiring and Pay in Cost-Cutting Measures
In an email sent to staff on Friday, the bank outlined its cost-cutting measures.
According to sources from the company, the bank will have significant cost reduction starting 2016 all through to 2017.
In June 2015, HSBC told investors that it would cut up to $5bn in costs by the end of 2017.
At the time, the London-based bank said it would also cut up to 8,000 jobs in the UK where it employs 48,000 people and lay down 25,000 employees globally. So far, 3000 jobs have been cut in the UK alone.
In responding to slow economic growth and increased regulation on banking risk globally, HSBC said it would reduce the operations of its investment bank by a third.
As part of its cost-cutting measures, the bank is looking to move its headquarters from London, where regulatory scrutiny is intense and the tax burden is heavier.
Richard Cao, an analyst in Shenzen said, ‘HSBC cannot run away from the global economic slump like other global banks.’
Following the news of imminent cost-cutting, HSBC shares fell by 1.6 percent down to 484.25 pence in the early trading hours in London bringing this year’s losses to 9.6 percent.
The bank is focusing more on profitable markets and may wind up operations in Lebanon and in India, according to insider sources.
Hong Kong is seen as the likely headquarters for HSBC as Europe’s largest bank moves away from London. Speaking to Bloomberg TV, Martin Gilbert, CEO of Aberdeen Asset Management, is however skeptical that the bank will move from London given the high logistics costs.
On Friday, the banking giant had suffered a cyber-attack but has since said that its mobile and online banking services have been fully restored.