Jobs cull at HSBC
Around 1,200 HSBC workers are set to lose their jobs after the banking giant announced plans to trim its workforce.
The job cuts will be made from all areas of the business across the country, although HSBC says it does not plan to reduce the number of frontline sales staff and those employed in its retail branches. Those at risk at being briefed today (25 March). At least a third of the redundancies will be made among back office staff. HSBC is also closing its two business centres in Leamington Spa and Newport, Wales, with a total of 370 jobs cut.
This is the latest cost-cutting scheme announced by bank, as it looks to "adapt to a new environment". It comes on the back of the 500 job losses announced at the end of last year, which centred on employees at its head office at Canary Wharf in London. Around 150 London-based staff will be handed their redundancy papers in this latest cull.
As Europe's biggest bank, HSBC has thus far declined the opportunity to follow rivals Lloyds Banking Group and Royal Bank of Scotland in shoring up its balance sheet with taxpayers' money, but did recently receive shareholder support for its £12.5 billion rights issue - the UK's largest ever cash call.
In a statement, Paul Thurston, managing director at HSBC, said: "The operating environment for banks in the UK is extremely challenging and will remain so for some time."
He added that the bank "deeply regretted" the job losses but there were "difficult decisions [...] to be made as we adapt to a new environment and ensure we are well positioned for the future".
Workers' union, Unite, reacted with dismay to the announcement.
"To slash jobs demonstrates the insincerity of the claim by HSBC to be 'the world's local bank'," says Derek Simpson, joint-general secretary of Unite. "This decision will ravage a number of local communities as sites are closed and other work is sent abroad."
A way a company can raise capital by creating new shares and invite existing shareholders in the company to buy these additional shares in proportion to their existing holding to avoid a dilution of value, which means keeping a proportionate ownership in the expanded company, so that (for example) a 10% stake before the rights issue remains a 10% stake after it. As an added incentive, the new shares are usually offered below the market price of the existing shares, which are normally a tradeable security (a type of short-dated warrant) and this allows shareholders who do not wish to purchase new shares to sell the rights to someone who does.