The job-cut news was earlier reported by French news daily Les Echos on Tuesday.
HSBC has started consultations with French trade unions on this. The planned cuts comprise nearly 100 positions, which were announced as disappearing from the European equities sales and research business earlier this year.
In an e-mailed statement, the bank said, “Its principle would be to reallocate capital and resources to overcome the structural challenges in this business, to focus on profitable activities, reduce the cost base and thus safeguard our competitiveness.”
Further, HSBC stated that its strategy is to be a prominent international bank in Europe, with a base in Paris, such that it can provide access to continental Europe for clients around the world.
The proposed job cuts are in line with the company’s restructuring plans announced in February, which involved the slashing of 35,000 jobs, reducing $4.5 billion in expenses and $100 billion of risk-weighted assets by radically shrinking its businesses in the United States as well as Europe.
Nonetheless, the company has put a pause on these efforts given the economic hardships due to coronavirus crisis. However, in June, HSBC CEO Noel Quinn, in an internal memo to the staff noted that job cuts are resuming and said “We could not pause the job losses indefinitely – it was always a question of ‘not if, but when’.”
Shares of HSBC have lost 41.2% so far this year compared with the 33.3% decline recorded by the industry.
Currently, HSBC carries a Zacks Rank #5 (Strong Sell).
The coronavirus pandemic has compelled a number of banks to consider job cuts to combat the economic slowdown. Commerzbank AG CRZBY is planning to cut in excess of 7,000 jobs. Royal Bank of Scotland RBS is likely to slash about a quarter of the company’s jobs in its investment banking unit in the United States. Moreover, the banking arm of Mitsubishi UFJ Financial Group MUFG is planning to reduce its staff by an additional 2,000 jobs by fiscal 2023.
HSBC Intends to Cut 38% Jobs in French Global Banking Unit