25 Mar 2009
HSBC is briefing staff on a redundancy programme that could affect 1,200 workers in the back-office processing, IT, human resources and finance areas of the business.
The cull will affect staff based in London, Leamington Spa, Leeds and Newport, and follows a previous cut of 500 jobs at the bank’s headquarters in December.
HSBC managing director Paul Thurston said UK banks are facing "extremely challenging" operating conditions.
"There are difficult decisions that have to be made as we adapt to a new environment and ensure we are well positioned for the future," said Thurston, announcing the cuts.
Workers union Unite said the redundancies “demonstrate the insincerity of the claim by HSBC to be ‘the world’s local bank’. This decision will ravage a number of local communities as sites are closed and other work is sent abroad.
“HSBC is a profitable institution and the announcement today is simply using the financial downturn as a pretext to make redundancies,” the union said in a statement.
“Workers at the bank will be alarmed at the pace at which this announcement is being rushed through, the bank is cutting corners in its failure to consult appropriately with the union.”
The news follows the bank’s announcement of a 62 per cent slump in pre-tax profit to £6.4bn compared to last year’s figures. Last week, HSBC’s stakeholders approved a £12.5bn rights issue, intended to help the bank build up capital ratios and aid future growth.
Operations Directors in most large enterprises are being instructed to cut their cost base significantly. Year 2K was an excuse to invest in new IT and the recession that followed was typified with a bandwagon to lay off staff. Unions and tribunals can't manage a barrage of potential layoffs across the industry, so the momentum allows employers to push through the changes with an accelerated schedule. The "Credit Crunch" is the 2009 restructuring banner which employers will use as the headline - citing that layoffs are happening everywhere.
Be sure that other organisations will look at their competitors and follow suit. Cutting staff does get instant publicity which helps to appease shareholders to an extent. Unfortunately it quickly gets buried by other similar bad news releases of job losses and the negative PR is diluted. Harsh reality is that once the job cut bandwagon gets rolling in banking - it cuts a swathe across the industry as it did after 2001.
Posted by: Peter Thompson 26 Mar 2009
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