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500 London jobs to go as HSBC axes back-room staff to cut costs
Jonathan Prynn & Bill Condie, Evening Standard26 Sep 2008
Banking giant HSBC is axeing more than 500 London jobs.
The redundancies are part of a worldwide programme of cut-backs in its global banking and market division.
About 1,100 mainly back-office jobs will go - half of them at the bank's Canary Wharf headquarters. They represent about four per cent of the bank's global wholesale banking workforce.
It is one of the biggest single job shake-outs in the City since the start of the credit crunch. Many other banks have been shedding staff but generally on a smaller scale.
HSBC spokesman Gareth Hewett said: "We're taking these steps in the light of the current global business and economic environment and our cautious outlook for 2009.
"Markets continue to be challenging and difficult, but our strategy leaves us well-positioned for the next wave of global growth, when it comes."
The Asia-focused bank is faring better than many in the crisis but even so last month reported its steepest profit decline since 2001 on subprime mortgage losses.
Even before the latest stage of the crisis, which saw Lehman Brothers hit the wall, the City has been shedding jobs in increasing numbers.
Before the Lehman collapse and the proposed bail-out of the rest of Wall Street, estimates for job losses in London financial services over the next year were up to 40,000.
Last month Commerzbank planned to axe whole departments at Dresdner Kleinwort as part of its e9 billion (£7.3 billion) merger with Dresdner Bank. In the past year, some 120,000 jobs in the industry have been lost around the world.
This year, Citigroup has cut more than 14,000 jobs and posted three straight quarters of losses. UBS of Switzerland has shed 7,000 employees as writedowns led to losses in the past four quarters.
HSBC was one of the first banks to flag big losses on US mortgages, with a $10.6 billion (£5.78 billion) writedown early last year. In total it has reported $27.4 billion (£14.9 billion) of writedowns in the crisis.
At the time of its first announcement, the bank warned that loan-loss provisions would exceed analyst expectations.
By September last year it said it was closing down its Decision One subprime mortgage unit and eliminating 750 jobs.
The early admission of losses has helped HSBC in that it is suggested as a potential buyer of distressed banks in the US.
It had been thought a contender for Washington Mutual, assets of which were sold to JP Morgan Chase last night.
HSBC has raised $5.1 billion (£ 2.77billion) of capital since the beginning of 2007.
Bradford & Bingley yesterday cut 300 jobs at its mortgage processing office in Borehamwood, Hertfordshire.
In total tens of thousands of jobs are expected to be lost in the financial services industries of the City and Canary Wharf during the downturn.
However, many are being told that work is available in the Middle East and Far East, which have been less badly affected by the credit crunch.
Reader views (3)
Do you remember a man called Nic Gleeson?. He was the man that brought down Bearings Bank Co single handed and did time for his actions.
Today 2008 there are many clones out there doing the same as he did and bringing the financial global banking system to a halt, infact MELTDOWN, and will action be taken to arrest the people involved in this fiasco. I bet many could not care less and walk off into the sunset....rich knowing they're O.K..
Once again it's left to the dear old tax payer to pick up the pieces, it's not right and if our Prime Minister talks of FAIRNESS as he did in his speech only this week, then he must act and act now.
If you are convicted of crimes in the drugs world all your assets are taken away from you and rightly so, the same laws should apply to those who bring down global financial banks to their gain for themselves in capital, and they just walk away from it.
Finally,
What would happen if all the tax payers said enough is enough and refuse to pay their bills and taxes for everything and said get stuffed to the banks and utilities who daily rip us off, now there's food for thought?.
- J.L., Scarborough . N.Yorkshire., 27/09/2008 10:08
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John in Dundee, calm down, dear, it's only a correction! Or would you rather have us all working in the fields and queuing for a week for our daily bread ration?
- St, London, 26/09/2008 14:22
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And if there is no "next wave of global growth" will all those at the top who thieved our money be forced to hand it back? Remember capitalism required an infinite resource and there is no infinite resource that comes free of charge, the damage done by capitalism to this once "infinite planet" is a testimony to that. Even if we were to find a simple way to exploit the whole infinite universe tomorrow surely the shenanigans of the past few months have shown us we cannot allow these thieves free rein even out there.
- John, Dundee, UK, 26/09/2008 10:47
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