HSBC plans job cuts as a part of its £660m savings plan

HSBC is planning to cut around 5,000 jobs in a fresh round of sacking as it outlines its next stage of turnaround strategy aimed at saving $1bn (£660m) in 2013. Sources close to the bank fear that the job cuts tally may even scale up to 10,000, if HSBC maintained the recent rate of staff cuts to cost savings as the bank warms up to outsourcing approach. Over the past year, HSBC has been ridden in scandals relating to money laundering which has led to the erosion of its cash reserves owing to the hefty fees that the bank had to shell out. The news of further job cuts comes just weeks after the bank announced hefty bonus payout to its chief Stuart Gulliver.

The new job cuts at HSBC will come in addition to a sharp reduction of staff numbers, from 302,000 to 260,000, over the past two years. About 10,000 of the redundancies so far has been the result of divestments, with the rest due to cost-saving measures. Sources said that the tally of job cuts could be more dramatic still if Stuart Gulliver goes ahead with plans to uproot HSBC’s tradition of in-house software development. The number of jobs in that area estimated to have been trimmed from 27,000 to about 21,000.

Details of Stuart Gulliver’s revival plan are set to be outlined to investors in May. HSBC is expected to close or sell a further eight to 10 businesses this year and next, in addition to the 49 already divested since 2011. The Europe’s biggest bank by market value has already exceeded its target of finding $2.5-$3.5bn (£1.65-£2.32bn) of cost savings by 2013, announcing $3.6bn (£2.3bn) of “sustainable annual savings” with its 2012 results. But the bank remains as far as ever from a related target, which is to cut its elevated cost-income ratio to between 48 and 52%. Over the two years, Stuart Gulliver, chief executive of HSBC, has spent considerable time trying to streamline HSBC’s global turf, both in order to impose more control from head office in London and to identify overlaps and inefficiencies.