HSBC: 4,400 net reduction in FTE (ex tech in 2025

HSBC: 4,400 net reduction in FTE (ex tech in 2025

HSBC Announces Workforce Reductions as Part of Restructuring Efforts

HSBC Holdings Plc is implementing a strategic workforce reduction in 2025 as part of its broader restructuring initiative under CEO Georges Elhedery. The bank plans to reduce global staff costs by approximately 8%, with senior managers and roles in its newly merged wholesale corporate and institutional banking division most affected. While the exact number of positions cut remains unspecified, the restructuring is expected to result in a net reduction of full-time equivalents, excluding technology roles, with the UK head office bearing a significant portion of the cuts.

The restructuring aligns with Elhedery's strategy to streamline operations, reduce costs, and focus on high-growth markets. Since assuming leadership in September 2024, Elhedery has merged commercial and investment banking units, scaled back underwriting activities in Europe and the Americas, and prioritized growth in Asia and the Middle East. The bank aims to achieve annualized cost savings of $1.5 billion by the end of 2026, with $300 million in savings anticipated in 2025 alone.

Performance-based compensation adjustments are also part of the overhaul. HSBC plans to reduce or eliminate bonuses for underperforming employees in investment banking and wealth management, potentially encouraging voluntary exits. The bank's 2024 bonus pool remained stable at $3.8 billion, with certain departments facing reduced payouts.

Financially, HSBC reported a 2024 pre-tax profit of $31.7 billion, with cost-to-income ratios rising to 49.9% in the first half of 2025 due to restructuring expenses. Despite short-term challenges, the bank projects mid-teens returns on average tangible equity from 2025 to 2027, excluding notable items.

The restructuring includes divesting non-core assets, such as HSBC's Canadian and French operations, and exploring the sale of its Singapore insurance unit. These moves aim to strengthen the bank's balance sheet and focus on markets where it holds competitive advantages.

While the workforce reductions and cost-cutting measures pose short-term challenges, HSBC emphasizes their necessity for long-term agility and profitability in a rapidly evolving financial landscape.