HSBC emailed staff this morning saying it's pausing its restructuring plan because of the coronavirus crisis. The full email to employees is below.
As a reminder, HSBC unveiled a new restructuring plan involving the elimination of 35,000 jobs in mid-February. Some of these roles have already been cut, with around six people on the London rates trading desk said to be laid off the day after the announcement and complaints that juniors were cut disproportionately.
For the moment, however, and further layoffs have been paused, along with external recruitment. "Our primary focus is on you and your health," says CEO Noel Quinn.
In February, HSBC said it could take a $600m hit if the virus continued beyond a six week period and into the second half. Today the bank warned that it will have to book high credit losses as a result of the virus.
Under the strategic plan that has now been cancelled, HSBC intended to prune its European rates business, exit G10 long-term derivative market making in the UK, reduce sales and research coverage in European cash equities, and transplant 'structured product capabilities' from the UK to Asia. All those affected - except those that have gone already - have presumably been granted a reprieve.
As we reported yesterday, some banks continue to make layoffs. Credit Suisse, for example, is cutting staff in London and has reduced severance pay. Goldman Sachs made some of its standard March layoffs in NYC last week.
HSBC's email to staff:
We wanted to send you a short update on decisions taken by the Group Executive Committee (GEC) in relation to the current environment and our strategic transformation programme.
The GEC made these decisions unanimously. We hope they reduce uncertainty and enable all of us to focus on supporting our customers and maintaining business continuity. Our primary focus is on you and your health.
The measures we announced in February to transform the Bank remain crucial. HSBC will become a simpler, more efficient, more customer-focused and leaner bank. The decisions we are announcing today enable us to better support our people during the present uncertainty, while remaining focused on our ambition to transform the Bank.
Whilst our intention was always to plan carefully and be thoughtful so as to minimise job losses during the programme, we recognise that the question of job losses is a concern for many of you. Because of the extraordinary impact of the COVID-19 pandemic, we have decided to pause, for the time being, the vast majority of redundancies associated with this programme where notices have not already been issued. We will also pause external recruitment, other than for a small number of front-line and business critical roles and those already with written offers – your GEC member will confirm the exceptions. Internal hiring and redeployment within the bank can proceed as normal.
Many elements of our transformation plan are moving forward as planned – the work to combine the back office of our wholesale businesses is continuing, and the creation of our Wealth and Personal Banking business is progressing. In addition, we are developing detailed plans across multiple work-streams. This will include establishing the RWA optimisation unit, so that when the situation changes we will be ready to move.
Thank you for everything you are doing to look out for each other, look after our customers and keep our business moving.
Noel Quinn Elaine Arden
Group Chief Executive Group Chief Human Resources Officer'
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