The bank’s headcount is expected to drop from 235,000 to around 200,000 over the next three years, a company spokesperson confirmed.
That would slash about 15% of its global workforce, though the exact number has not been finalized.
The bank’s plan also involves scrapping about $100 billion in assets by the end of 2022, and it will reduce costs by $4.5 billion.
HSBC shares in Hong Kong fell around 2% on the dismal earnings report.
“Parts of our business are not delivering acceptable returns,” interim CEO Noel Quinn said in a statement. “We are therefore outlining a revised plan to increase returns for investors, create the capacity for future investment, and build a platform for sustainable growth.”
HSBC said that it would maintain its dividend, but added that it would make cuts to its sales and trading and equity research units in Europe, as well as shift more resources from the United Kingdom to Asia.
It also plans to consolidate many of its divisions globally to save money. The bank will cut a third of its branches in the United States, where it wants to reposition itself “as an international client-focused corporate bank.”
Its investment banking team will also see major changes. While London will remain the group’s global hub, HSBC said it would reorganize its global banking and markets team to focus more on Asia and the Middle East, where it plans to shift more resources and build up its position in emerging markets.
“Around 30% of our capital is currently allocated to businesses that are delivering returns below their cost of equity, largely in Global Banking and Markets in Europe and the US,” Quinn wrote in a report to shareholders Tuesday.
The lender derives the vast majority of its profit from Asia, where the bulk of coronavirus cases outside China have been reported.
It warned Tuesday that the ongoing virus outbreak was “causing economic disruption in Hong Kong and mainland China and may impact performance in 2020,” adding that it has “created significant disruption for our staff, suppliers and customers, particularly in mainland China and Hong Kong.”
Analysts had expressed concerns that Quinn has not already been confirmed as HSBC’s permanent CEO, given the management shakeup he has spearheaded and the fact that he was to announce Tuesday’s strategy update.
HSBC addressed the topic Tuesday, saying that the appointment process remained “ongoing.”
The bank expects to announce a permanent CEO “within the six to 12 months initially outlined,” it added.
— This is a developing story.