London: HSBC Holdings Plc is poised to axe about 700 jobs in its UK retail bank arm, as swingeing staff cuts begin in earnest at banks across Europe stung by a limp economic recovery, trading woes and tougher regulation.
The fresh round of layoffs, affecting Switzerland’s Credit Suisse Group AG and Italy’s Banco Popolare among others, is hitting investment banking divisions and branch networks after months of mounting scrutiny on costs.
Smaller-scale cuts throughout the early part of this year as banks discreetly trimmed back in some weaker areas look set to escalate dramatically.
Job reductions at HSBC will mainly affect retail banking, people close to the matter said on Thursday. About 460 financial advisory positions are set to go across its UK branches, one of the sources said.
The move comes prior to the implementation of new UK rules that will affect how banks offer advice, expected in January 2013 and known as the Retail Distribution Review.
The redundancies will add to 15,000 jobs set to go at Britain’s part-nationalised Lloyds Banking Group Plc after new boss Antonio Horta-Osorio unveiled a strategy overhaul.
This latest round comes on top of 27,000 job losses at Lloyds since the 2008 financial crisis.
Trade union Unite slammed the redundancy plans at the two British banks, adding it was “flabbergasted” by HSBC’s move.
“Unite has been informed that these cuts will generate savings of around £9 million for HSBC. Is it a coincidence that this figure is the equivalent to the bonus for Stuart Gulliver, HSBC chief executive, due to be paid later this month?” said David Fleming, Unite national officer.
HSBC, which employs 55,000 staff in the UK, declined to comment. Lloyds employs some 103,000 staff.
Peers across Europe are also swinging the axe and layoffs are starting to fall even at some of the biggest Wall Street investment banks, more than two years after many began putting the financial crisis behind them by hiring heavily.
A tough second quarter for investment banking earnings, dragged down by sovereign debt woes in Europe and trading jitters, is prompting many to cut back in areas where revenue has not come up to scratch.
Credit Suisse is one of those kicking off one of the deepest round of layoffs so far this year. Cuts at its investment bank will affect around 600, people familiar with the matter said.
About 100 of those cuts are expected to fall in London, where the bank launched a consultation on jobs this week. Credit Suisse declined comment.
Goldman Sachs Group Inc, meanwhile, plans to lay off 230 employees in New York at the end of this year because of economic conditions, according to a state filing.
Italian lender Popolare, which has 20,000 staff, said it was cutting 1,120 jobs and shifting 1,100 employees to boost its retail network.