HSBC announces up to 4,700 job cuts

Chief executive John Flint steps down as lender begins cull of senior staff

HSBC is set to slash up to 4,700 jobs after the lender announced the shock departure of its chief executive, warning of a “challenging global environment”.

HSBC’s chief financial officer Ewan Stevenson said in a call with investors on Monday that up to 2 per cent of the bank’s workforce will go, with the focus likely to be on senior roles as the company seeks to cut salary costs by around 4 per cent.

The bank would not give any further details on where the axe may fall.

Chief executive John Flint stepped down from the top job after just 18 months with HSBC, ​with the decision made “by mutual agreement with the board”.

HSBC’s commercial banking boss Noel Quinn will take over as interim chief executive while the lender seeks a permanent replacement both internally and externally.

“Although not carrying out his day-to-day duties after today, he remains available to assist HSBC with the transition,” the bank added on Monday.

The outgoing boss is entitled to a year’s salary and is eligible for a bonus based on 2019 performance. It is not yet clear how much he will collect in total after leaving the bank but HSBC confirmed he had “good leaver status” meaning that he is entitled to keep long-term share options and other benefits.

Good leaver status is generally conferred by employers only when a staff member has not been found guilty of misconduct.
 
The surprise announcement was delivered alongside HSBC’s latest half-year results, which showed that pre-tax profits rose 15.8 per cent to $12.4bn (£10.2bn).

Mr Flint said: “I have agreed with the board that today’s good interim results indicate that this is the right time for change, both for me and the bank.”

Mr Stevenson told investors: “We’re not on track with the turnaround of our US business ... The current return on the US business is not acceptable.”

He added: “The US revenues outlook has become more challenged in recent months ... Trade tensions between the US and China are progressively affecting the growth output in both markets.”

Analysts queried the logic of Mr Flint’s departure after a relatively strong set of results.

“Flint’s only been in the role 18 months and while his strategy might not be revolutionary it’s certainly not been a disaster,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“It seems strange to be changing leadership again before reforms have had a chance to bed in.

“With the retail bank doing well when others are struggling and the outlook for the investment bank set to improve, the change of leadership could be particularly confusing.

“However, we think the very cautious outlook statement might provide the explanation. With macroeconomic and geopolitical headwinds mounting, the HSBC board could be looking for more radical reform – what that will look like remains to be seen.”

HSBC has extensive operations in both Asia and the UK, locations that are facing economic and political challenges.

The UK outlook is clouded by ongoing Brexit uncertainty and the increasingly likely prospect of major disruption after leaving the EU with no deal.

Meanwhile, China is being buffeted by tariffs imposed by Donald Trump on hundreds of billions of dollars of its exports to the US.