Reorganisation to make company 'simpler, leaner,' says CEO
According to group chief executive Georges Elhedery, HSBC's restructuring plan will target senior roles as opposed to a company-wide cut. This shift aims to simplify the organization and remove duplicated senior roles.
“The primary reason for this reorganisation is to make us a simpler, leaner organisation, with faster decision-making (and) stronger empowerment of our front-line people,” Elhedery said during the bank’s third-quarter earnings call, according to the Straits Times.
He added that job cuts would proceed quickly, with more details to be released in February 2025.
The reorganization will result in cost savings, with Elhedery noting that any initial expenses would be offset by future financial benefits.
Reorganization of HSBC global operations
The plan was announced on October 22 and outlines a reorganization of HSBC's global operations into four streamlined business lines, including dedicated divisions for Britain and Hong Kong, and two other divisions comprising international wealth and premier banking, and corporate and institutional banking globally.
Prior to the reorganization, HSBC had three main divisions: commercial banking, global banking, and wealth and personal banking, according to the Straits Times.
. The restructuring follows unsuccessful attempts in 2022 and 2023 to spin off its Asia business. A spokesperson from HSBC said the Singapore branch was unable to provide specific numbers on senior management roles affected.
Senior analyst Michael Makdad from Morningstar told the Straits Times that the move is “risky,” noting, “Cutting costs is great, but there’s a reason why the costs were there, which is to generate revenue.”
HSBC also announced that it would repurchase up to US$3 billion (S$3.97 billion) worth of its shares in the coming months and reported a US $8.5 billion profit for the third quarter, up 10 percent year-on-year, though shares closed flat at HK$71.85 on October 30.
