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HSBC plans to cut up to 50,000 jobs worldwide and close operations in Brazil in Turkey as part of restructuring to realize up to US$5 billion in cost savings by 2017, the British multinational bank announced Tuesday.
The massive cuts in unprofitable markets are part of a larger HSBC pivot toward Asia to capitalize on increasing wealth in the region in what the bank characterizes as a “changed world.”
“We recognise that the world has changed and we need to change with it,” said HSBC Group Chief Executive Stuart Gulliver in a statement. “The world is increasingly connected, with Asia expected to show high growth and become the centre of global trade over the next decade.”
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Ending operations in Brazil and Turkey will shed HSBC 25,000 employees, with an additional 10 percent cut in its global workforce in a push toward automated digital banking to cut costs poised to eliminate as many as 25,000 more jobs, including as many as 8,000 in the U.K.
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Here's #HSBC's, recently announced leaving Turkey&Brazil, freshly uploaded strategy,which will be presented today. pic.twitter.com/lYt2Nwsn3R
— Dorothy (@dorothyier)
June 9, 2015
Despite selling over 850 branches in Brazil, HSBC says it still plans to maintain a presence in the country to provide international services to large corporate clients.
Brazil's second largest private lender, Banco Bradesco SA, is the most likely buyer in the up to US$4 billion sell-off of HSBC holdings in the country, according to Bloomberg. The deal is expected to go through by August.
The announcement of HSBC closing operations in Brazil comes the same day as President Dilma Rousseff announced a new US$64 billion program in infrastructure projects to attract private investment and boost economic growth to rebuild economic stability in the country.
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HSBC's worldwide “significant reshaping” also includes a review of its headquarters this year, located in London since 1993. Financial analysts suggest it is likely the headquarters will relocate to Hong Kong.
The global cutbacks come in the wake of a massive tax evasion and money laundering scandal in which HSBC was found to have aided its wealthiest international clients in hiding billions of dollars of assets in Swiss banks to dodge taxes.
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Founded 150 years ago in Hong Kong, HSBC is one of the world's largest banking and financial institutions with 6,100 offices in over 73 countries in most regions of the world.
