HSBC jobs cull not expected to affect Ireland

Hopes have emerged that the Irish operations of HSBC will be unaffected by the bank’s plans to cut up to 50,000 jobs from its worldwide operations.

The London-headquartered international banking giant yesterday unveiled plans to exit unprofitable business lines and locations; a move set to see it cut about 50,000 jobs over the next two years made up of 20,000 direct employees and 30,000 from associate ventures.

Up to 8,000 positions are believed to be affected in the UK, where HSBC could be about to rebrand its branch network under the Midland banner and spin it off.

According to a spokesperson for the Unite trade union which represents HSBC workers in the UK and Ireland the bank has failed to offer a regional breakdown on the job losses. However, Unite representatives will meet with HSBC management next Monday to gauge more information and to seek an introduction of a voluntary redundancy scheme, which currently doesn’t exist at HSBC.

Finance union, the IBOA doesn’t represent any of the Irish staff, and had no comment to make on the matter.

However, Unite’s spokesperson suggested it was more likely that HSBC’s cuts in this part of the world would affect frontline branch staff in the UK, as well as call centre and IT staff.

The bank does however, have two branches in Ireland in Belfast and Derry. Its main Irish operations, however, cover 400 or so employees in the areas of security services/ fund management and corporate banking services in its Dublin office.

Half of the 50,000 jobs will come from HSBC selling businesses in Brazil and Turkey. Chief executive Stuart Gulliver has made it his mission to boost profits since taking the helm of Europe’s largest bank, but his efforts have so far been foiled by high compliance costs, fines and low interest rates.

The bank’s second big overhaul since the financial crisis will see it cut its assets by a quarter, or $290bn (€257bn) on a risk-adjusted basis by 2017, and slice $140bn from its investment bank which will subsequently make up less than a third of HSBC’s balance sheet from 40% now.

Mr Gulliver also pledged higher payouts for investors. “I believe we are in the foothills of another prolonged period of dividend growth for the firm,” he said. He said the bank’s dividend had grown from 17 years from 1991 to 2008.

However, investors were cautious about how HSBC would translate job cuts into meaningful savings given the higher cost of doing business in a tougher post-crisis business environment marked by new rules on risk and compliance.

“Slaughtering the staff is not necessarily the solution unless management makes the bank considerably less complex,” said James Antos, analyst at Mizuho Securities.

Like rivals Deutsche Bank and Barclays, HSBC has been facing calls for more radical cuts at the investment bank given tough operating conditions. Some analysts said the changes did not go far enough, though others said the asset reduction plan was a substantial shift.

“The cuts provide significant headroom for the group to fund asset growth in Asia and absorb risk-adjusted basis inflation, while protecting its ability to pay a progressive dividend,” said Gurpreet Singh Sahi, analyst at Goldman Sachs.

Additional reporting by Reuters