HSBC pauses worldwide job cuts despite pre-tax profit drop by 48%
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International bank HSBC has paused a planned restructuring programme which would have included the termination of some 35,000 jobs around the world. The initiative had been announced this February, and was at the time described by the Bank’s CEO Noel Quinn as “one of the deepest restructuring and simplification programs in the bank’s history”.
In a statement related to the presentation of quarter 1 results, the Bank said that it is now hitting the pause button on these proposed reforms to reduce uncertainty among staff during this difficult time. Quinn said:”I take the well-being of our people extremely seriously. We ave therefore paused the vast majority of redundancies related to the
transformation”
The CEO went on to say that the economic impact of the Covid-19 pandemic on the Bank’s customers has been the main driver of the change in its financial performance
since the turn of the year. The resultant increase in expected credit losses in the first quarter contributed to a material fall in reported profit before tax compared with the same period last year.
In its statement, HSBC said that it “has always been there for our customers in times of crisis, and we are working hard to support them during this unprecedented period of disruption. We do so from a position of strength, with robust levels of capital, funding and liquidity. The market-specific support measures that we are offering our personal and business customers have had strong take-up, and we remain responsive to their
changing needs. We are also working closely with governments around the world to channel fiscal support to the real economy quickly and efficiently.
The Bank said that it will continue to press forward with of our transformation with the aim of delivering a stronger and leaner business that is better equipped to help its
customers prosper in the recovery still to come.”
The Bank announced that its pre-tax profits dropped to 3.2 billion dollars in Quarter 1, a 48% drop compared to 2019. It also announced that it expected credit losses of around 3 billion in the first three months of the year, with the significant drop in oil prices playing a major role in this.
