HSBC is in news and not for good reasons. The bank has recently laid off employees working at the mid-senior level (vice-president and above), a report by The Financial Times said. The employees were fired on the same day they were supposed to get their bonus figures. However, they were let go without any bonuses.
According to FT, the decision was taken as part of a larger plan to cut costs under HSBC’s new CEO, Georges Elhedery, who started in January 2024.
A person familiar with the situation told FT that this decision was surprising as it’s “not like HSBC”. The person noted that the bank has always been known to take care of its employees. But with economic challenges and changes in the banking world, HSBC seems to be focusing more on managing costs than sticking to its old ways.
Although HSBC hasn’t officially commented on the matter yet, this could be part of an effort to streamline operations and make the bank more profitable. The bank has been working on improving its investment banking division by focusing on areas of growth and cutting costs in weaker areas.
The layoffs come at a tough time for the financial industry, with global investment banks facing slower deal-making, higher interest rates, and economic uncertainty. Many major banks have already cut jobs to adjust to the tough conditions, and HSBC’s decision highlights the pressure on banks to stay profitable.
It’s unclear whether HSBC will keep making these cost cuts, but the unexpected layoffs on bonus day clearly show the bank’s shifting priorities.