HSBC resumes plans to cut 35,000 jobs after pandemic pause

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
HSBC paused layoffs in March due to the coronavirus pandemic but has has resumed plans to cut 35,000 jobs globally. (Dave Rushen/SOPA Images/LightRocket via Getty Images)

HSBC (HSBA.L) has resumed plans to cut 35,000 jobs globally, ending a hiatus provoked by the COVID-19 pandemic.

Chief executive Noel Quinn told staff in a memo on Wednesday morning that the bank would “lift the pause on job losses”.

“We could not pause the job losses indefinitely — it was always a question of ‘not if, but when’,” Quinn wrote in the memo, which was reviewed by Yahoo Finance UK.

A spokesperson for HSBC confirmed the contents of the memo but declined to comment further.

Read more: HSBC to axe 35,000 jobs as profit slumps

HSBC first announced plans to reduce its global headcount from 235,000 to 200,000 in February as part of a sweeping overhaul plan aimed at turning around the business.

The lender paused layoffs in March as a result of the COVID-19 pandemic. Quinn said in Wednesday’s memo that this allowed HSBC to “focus on one another and our clients”.

However, he said now was the “right” time to resume the turnaround plan, as many developed economies were beginning to open up from lockdowns.

“You will have seen that our profits fell in the first quarter, and virtually all economic forecasts are pointing to challenging times ahead,” Quinn wrote. “The reality is that the measures and the change we announced in February are more necessary today.”

Read more: HSBC sets aside $3bn as credit losses expected to soar

HSBC set aside $3bn in the first quarter to cover an expected surge in losses due to the pandemic. The increase in provisions meant profits halved.

Quinn thanked staff for their hard work during the pandemic and said he was aware that the job cuts could create “understandable concern and uncertainty”.

“I want to be open with you about the reality of the current situation,” he wrote.

Shares in HSBC rose 1% on Wednesday morning.