HSBC to make investment banking job cuts starting in Asia

Editorial

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The cuts will begin in Asia from Monday, with broader layoffs planned for the global workforce expected to unfold over the coming weeks and months.

Elhedery’s restructuring agenda

Since taking over as CEO in September 2024, Elhedery has already implemented significant cost-cutting measures including:

• Combining the commercial banking division with its global banking and markets unit;
• Pulling out of some underwriting and advisory businesses in Europe and the Americas; and
• Reducing his own group executive committee by a third.

Bloomberg reported in December that over 40% of HSBC’s top 175 managers would be impacted by these leadership changes, which are expected to be finalised by June.

In response to a Bloomberg enquiry, a HSBC spokesperson explained “As announced on October 2024, HSBC is focused on increasing leadership and market share in the areas where it has a clear competitive advantage and where it has the greatest opportunities to grow.”

Analysts predict the bank will report a pre-tax profit of $31.7 billion for 2024, a 4.6% increase from the previous year. Despite concerns over layoffs, HSBC’s stock rose 0.5% on Thursday morning, reaching a seven-year high in Hong Kong trading.

Managing employee morale amid uncertainty

HSBC’s pullback from equity underwriting and advisory services outside it’s core markets of Asia and the Middle East has left dealmakers in Asia anxious about the future.

Many employees have pursued opportunities at rival firms, and expressed concerns that the bank could lose cross-border M&A advisory from Asia to Europe and the US, and lead roles on US listings of Chinese companies.

In response to staff anxiety, veteran dealmaker Matthew Ginsburg, reassured employees that although Asia will be impacted by changes, the region remains a key focus for HSBC. Management have also promoted the idea of the bank transitioning into a boutique dealmaker with a robust balance sheet, reassuring employees that HSBC’s extensive corporate and institutional banking relationships in the West will play a crucial role in securing mandates for deals in Asia and the Middle East.