“You will have seen that our profits fell in the first quarter, and virtually all economic forecasts point to challenging times ahead,” Quinn said in the letter, which was shared with CNN Business and first reported by Reuters. “The reality is that the measures and the change we announced in February are even more necessary today. We could not pause the job losses indefinitely.”
The bank said it temporarily shelved most layoffs in March to reduce uncertainty for employees and protect its capacity to serve customers amidst the coronavirus pandemic. It now needs to “look to the long-term” and move ahead with its transformation program and cut costs, Quinn said. “When making decisions about redundancies we will proceed thoughtfully and consider local circumstances. We will aim to redeploy colleagues where we can,” he added.
The company said it will “make every effort” to fill vacancies with internal candidates.
The coronavirus crisis has compounded negative headwinds facing HSBC, which is embarking on one of the deepest restructuring programs in its history. The bank’s pretax profit plunged 48% to $3.2 billion in the first quarter, compared to a year earlier, and it set aside billions of dollars to cover credit losses arising from the pandemic.
Part of the bank’s strategy overhaul involves shifting resources away from the United States and Europe to the Middle East and Asia, where it already makes most of its profits. It plans to ditch $100 billion in assets by the end of 2022, shrink its investment bank and close a third of its US branches.
Quinn told staff that the company could not provide a “unified timetable” for job cuts, but that notice periods in various markets mean that most staffers will remain either employed or paid for much of the rest of the year. “Everyone who leaves will be offered support on searching and applying for jobs and preparing for interview,” he said.
— Michelle Toh contributed reporting.