HSBC to retain some bankers for 3 to 6 months before winding down business units

HSBC is placing select investment bankers on a short-term retention status. The arrangement aims to allow them to wrap up client mandates before certain business units wind down.

The bank is continuing to introduce sweeping changes to staff under its new CEO Georges Elhedery, as part of a wider effort to streamline operations and sharpen its competitive edge.

The temporary contracts – lasting three to six months – span Europe, Asia, and the Americas, according to sources close to the matter who spoke to Bloomberg.

The overhaul includes reducing the number of vice-chairpersons across various markets, although the exact number of affected employees remains unclear.

A spokesperson for HSBC reaffirmed the bank’s commitment to serving clients globally, stating: “HSBC is moving to a new, simpler structure as we continue to focus on products and geographies where we can have a clear competitive advantage.”

The massive shift under Elhedery’s leadership

Since stepping into the role in September 2024, Elhedery has spearheaded one of the most significant restructurings HSBC has seen in over a decade. His approach has been to consolidate business divisions, notably merging the commercial banking unit with global banking and markets.

The bank is set to absorb US$1.8 billion in restructuring costs over the next two years as it reshapes its operations.

In January, HSBC began informing managers in corporate advisory and equity underwriting teams in New York, London, and continental Europe about the closure of these business units – a decision that is set to affect hundreds of jobs.

By February, the bank had initiated job cuts in its investment banking division, starting in Asia before extending to other regions.

Also Read: DBS predicts AI will affect 4,000 temp jobs

The human cost of cost-cutting

The restructuring drive has brought with it stringent cost controls, with some senior bankers reportedly having to cover team-building expenses out of their own pockets.

HSBC’s larger cost-saving agenda is also driving layoffs across its investment bank, with initial cuts beginning in Asia before expanding globally.

Bloomberg reported that, in December, the bank had already decided to reduce 40% of its top 175 senior managers, with these cuts expected to conclude by June this year.

Some employees in the bank’s markets division were already let go in February. Insiders suggest these redundancies are driven by performance reviews, operational simplification, and the elimination of duplicate roles.

Also Read: JPMorgan layoffs coincide with hiring

FinTech ambitions take a hit

As part of its strategic review, HSBC has also pulled the plug on Zing, its international payments app.

Launched just a year ago with the promise of transparent fees and competitive rates, the platform has succumbed to compliance restructuring challenges and a broader shift in HSBC’s digital banking strategy.

The closure of Zing marks yet another setback in the bank’s FinTech expansion efforts.

A new era for HSBC?

Elhedery’s restructuring moves reflect an attempt to reposition HSBC in a fast-evolving financial landscape.

By trimming its investment banking presence in the UK, Europe, and the Americas, the bank is doubling down on areas where it sees the greatest potential for growth.

However, with significant job losses and cost-cutting measures affecting morale, the success of this strategy will ultimately depend on how well HSBC steers through these turbulent waters.