Friday, September 26, 2008

HSBC cutting 1,100 jobs

HSBC Holdings PLC, Europe's largest bank by market value, is cutting 1,100 jobs worldwide in the wake of the financial turmoil, a spokesman said Friday.

The London-based lender is laying off 4% of its global banking and market division, with half of them taking place in the bank's operation in Britain, said spokesman Gareth Hewett in Hong Kong.

"We've taken the action because of the current market conditions, the economic environment and our cautious outlook of 2009," Hewett said by phone.

All of the staff being cut has already been told. In Hong Kong, HSBC, which operates in Europe, Asia and the Americas, is laying off 100 staff. HSBC has a 335,000-strong work force globally, and so the job cuts will only hit 0.3% of its total employees.

Peter Wong, the banking group's executive director for Hong Kong and China, did not rule out the possibility of further layoffs.

"The financial environment is difficult now. It's nothing extraordinary that some staff have to leave our operations," Wong told broadcaster Cable TV. "I think this kind of action will continue to come in the financial sector."

HSBC has been hit hard by the credit crisis, largely because of its ownership since 2003 of Illinois-based lender Household International Inc. -- the biggest U.S. subprime mortgage lender.

Last month, HSBC reported its steepest fall in profit since 2001 as costs for bad U.S. mortgage loans mounted. Net profit for the first half of the year plunged 29 percent to $7.7 billion from $10.9 billion in profit in the January to June period of 2007.

The biggest losses came from the North American market, which HSBC depends on for a quarter of its revenue. Operations there posted a first-half loss of $2.9 billion, compared with profit of $2.4 billion a year ago.

Friday's job cuts are the second major money-conserving move the bank has announced in as many weeks.

On Sept. 19, HSBC canceled a $6 billion agreement to purchase a controlling stake in South Korea's Korea Exchange Bank from U.S. private equity group Lone Star Funds

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