HSBC Holdings PLC is considering eliminating hundreds of LSM EOS in investment banking under pressure from the top responsible, John Flint, to the top executives of the bank to reduce costs, according to people familiar with the plan.
At least 500 jobs in global banking and markets could be cut, although no official figures were reported, people asked to remain anonymous. Greg Guyett, who recently took exclusive control of global banking, would undertake cuts in his part of the business, one person said.
The reductions in the unit could begin in mid-June and will take place during the year, people said. They are part of wider job cuts across the bank and represent the last stage of HSBC’s «Project Oak» reorganization.
«The lines of business and functions constantly re-evaluate their needs to ensure that they have the right roles in the correct places,» HSBC said in a statement.
The bank’s actions jumped to an intraday peak after the news was known and were negotiated with a fall of 0.1% at 2:10 p.m. in London.
Flint has focused on achieving higher revenue growth from spending while trying to leave his mark on the bank, which generates most of his income in Asia. The manager rebuked his top executives in March for failing to achieve the cost objectives, said people with knowledge of the matter.
The unit known as GBM includes the bank’s business and corporate finance operations, and employs approximately 24,000 workers in the 48,500 division’s total workforce, which includes contract workers and other support staff.
Project Oak job cuts should facilitate the company’s goal of achieving higher revenues from spending, as the incurred cost can be counted as an extraordinary element instead of being accounted for in HSBC’s general cost base. Said one of the people.
This person added that it is a deliberate strategy to encourage strong cuts, as executives might have resisted making the necessary cuts in the past to avoid the impact on their own cost budgets as compensation for Dismissal.