06 February 2020
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HSBC is set to unveil a strategy overhaul which will see a new round of job cuts targeting senior managers and reduce its presence in some smaller markets, Reuters reported.
The round of job cuts is expected to affect "a large number of global managerial roles across all business units," particularly in London, though Asia would not be spared, the news agency reported, noting that the region contributes to 90% of the bank's profits. It is unclear exactly how many jobs will be cut.
"More than cost-cutting, the idea is to make the structure at the top a bit leaner and give more decision-making powers to the regional managers who are closer to the clients," said one of Reuters sources.
More than cost-cutting, the idea is to make the structure at the top a bit leaner and give more decision-making powers to the regional managers who are closer to the clients"
It also said that as part of the restructuring, the bank will review its presence in South America, which currently contributes to only 3% of its pre-tax profits.
The restructuring is an attempt to boost the profitability of the bank amid slowing economic growth, an outbreak of the coronavirus, Britain's withdrawal from the Eu and lower interest rates.
The changes are expected to be part of a strategy update the lender's interim Chief Executive Noel Quinn will unveil on Feb 18.
HSBC has also decided not to name a permanent chief executive when it unveils this strategic overhaul, in a move that risks undermining investor confidence in the plan to reshape the lender dramatically.
Mark Tucker, HSBC chairman, has said that the search to replace John Flint, who was ousted as chief executive in August last year, would take six to 12 months. But three top 20 investors said they were expecting either Quinn or an external candidate to be named as permanent chief executive before the new strategy was unveiled.
"This is one of the last shots they have on a generational basis to reorganize," Joseph Dickerson from Jefferies International told Bloomberg. The analyst wants to see an attack on costs "that are trapped from administering a string of sub-scale businesses."
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