Amid plunging European (and global) interest rates, Brexit uncertainty at home, and social unrest abroad (collapsing Hong Kong property prices and ATMs running out of cash), UK-based banking behemoth HSBC is reportedly implementing a global cost-cutting effort known internally as "Project Oak."
On top of around 4,700 planned layoffs, The FT reports that new interim CEO Noel Quinn - following the departure of John Flint - is planning cost-cutting measures that could result in 10,000 layoffs. According to one of the people briefed on the matter:
“We’ve known for years that we need to do something about our cost base, the largest component of which is people - now we are finally grasping the nettle."
“There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”
HSBC’s latest cost-cutting drive will reportedly focus mainly on high-paid roles, and will be implemented under a scheme known as “Project Oak”, which tried to encourage executives and managers to shrink their teams by offering funding from a central pot of money to cover redundancy payouts.
HSBC's move comes as global banks (Deutsche Bank most recently following cuts at Barclays, SocGen, and Citi) make tens of thousands of staff redundant as the industry contends with low or negative interest rates and weak investment banking revenues.
Finally, The FT notes that HSBC could announce that it has begun the cost-cutting exercise when it reports third-quarter results later this month, one of the people said, although the bank has not yet made a final decision on when to make the plan public.