HSBC to cut 30,000 jobs in global overhaul

Posted Aug. 01, 2011, at 7:46 p.m.

LONDON — British banking group HSBC said Monday it will cut 30,000 jobs worldwide by 2013 and sell almost half its retail bank branches in the United States as part of a new strategy to focus on fast-growing emerging markets.

The bank, which reported a better-than-expected 3 percent increase in pretax profits to $11.5 billion in the six months to June, already has shed 5,000 jobs this year. Another 25,000 will be cut by 2013, spokesman Patrick Humphris said.

HSBC employs around 296,000 people worldwide.

Humphris declined to give details of where the job cuts would be but said the group is hiring in emerging economies such as Brazil and Mexico.

The move echoes similar announcements by other global banks, such as Credit Suisse, UBS and Goldman Sachs, which in recent weeks said they needed to trim payrolls to adjust to tougher market conditions.

As part of its restructuring, HSBC will sell 195 retail banking branches in the United States to First Niagara Bank for around $1 billion. Most of the branches to be sold are in upstate New York, while six are in Connecticut. Four more are in northern Westchester County, and two in Putnam County.

Irene Dorner, president of HSBC Bank USA, says even after the sale, HSBC still will employ more than 4,000 people in western New York, most of them in downtown Buffalo.

She says the bank also will continue its community involvement throughout upstate New York. In Buffalo, it has naming rights on HSBC Arena, where the NHL Buffalo Sabres play.

The bank still is dealing with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest subprime lender in the United States at the time, which resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

“I am pleased with the results, which mark a first step in the right direction on what will be a long journey,” new chief executive Stuart Gulliver said in a statement.

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