HSBC has confirmed plans to cut jobs worldwide as part of an effort to reduce costs by £1.2 billion by the end of 2026. The banking giant said the cuts would primarily impact senior management and staff within its newly restructured corporate and institutional division, with the UK head office expected to bear a significant portion of the reductions.
HSBC restructures operations to streamline costs
The decision to reduce global staff costs by 8% comes amid a broader restructuring aimed at simplifying the bank’s operations and focusing on its most profitable areas. HSBC has merged two of its three main divisions, eliminating layers of senior management, and withdrawn from mergers and acquisitions banking activities in the UK, Europe, and the US.
According to HSBC’s chief executive Georges Elhedery, the job cuts are not being tracked as a specific reduction in headcount but as part of an overall strategy to lower expenses. “We are creating a simple, more agile, focused bank built on our core strengths,” he stated.
The bank has committed to generating £238 million in cost reductions this year, with a long-term target of £1.2 billion by 2026. To facilitate these cuts, HSBC expects to incur £1.4 billion in severance and upfront costs over the next two years while reallocating £1.2 billion from non-strategic activities to core business areas.
Financial performance and executive pay adjustments
Despite the cost-cutting measures, HSBC reported strong financial results for 2024. Pre-tax profits rose by 6.6% to £25.6 billion, up from £24.1 billion in 2023. Revenue remained steady at £52.2 billion, while operating expenses increased by £793 million, according to the bank’s annual report.
At the same time, HSBC has proposed a significant pay increase for Georges Elhedery, with his total remuneration package set to rise to a potential maximum of £15.2 million in 2025. The bank also maintained its bonus pool at £3.01 billion for 2024, slightly higher than the previous year’s £2.99 billion.
Elhedery highlighted the importance of cost control while ensuring the bank remains competitive. “I have put in place a smaller, core team of exceptionally talented leaders driven by a growth-orientated mindset and a firm focus on dynamically managing our costs and capital,” he said.
Efficiency and long-term profitability are now HSBC’s top priorities, marking a dramatic change in the company’s global strategy. It is unclear how these cost-cutting initiatives would affect staff and market positioning as the banking industry develops further.
