HSBC layoffs: thousands of job cuts for the bank to save $1 billion

British bank HSBC, the largest in Europe, aiming at further cost savings of $1 billion in 2013, would lay off thousands of employees over the 40,000 already sent home since the beginning of the financial crisis. The number of redundancies has not yet been determined, but according to British financial newspaper Financial Times that quoted internal bank sources, it would be about 5,000 employees in addition to the previous layoffs.

The bank, which must review its strategic restructuring plan, indicated earlier this month that it aims to make additional savings of $1 billion in 2013. Stuart Gulliver, HSBC CEO announced that the bank would “fixate on costs.”

Financial Times writes that by applying the employees-savings ratio, the amount of $1 billion in savings can be reached by eliminating close to 10,000 employees. The announcement could be made in just two months, at the next meeting of the investors. HSBC’s cost-income ratio is 62.8%, higher than the goal of 50%.

HSBC revealed in May 2011 a strategic plan to reduce costs, by dropping 30,000 employees worldwide. But, in two years only, HSBC has reduced over 40,000 staff worldwide, from 302,000 to 260,000 employees. According to estimates of the Confederation of British Industry in January and PricewaterhouseCoopers, the financial sector in the UK is expected to lose 43,000 jobs in the next six months, following the companies’ attempts to reduce costs.

Banks, asset managers and insurers have reduced in the last quarter of 2012 the staff by 25,000 employees, and in the first three months of this year the number of jobs in this industry could be reduced by another 18,000, according to the study. Restructuring of this industry since 2008 is expected to reach in the UK up to 130,000 – more than 10% of the approximately 1 million employees at the onset of the crisis.

HSBC agreed in December to pay $1.92 billion to settle charges of non-compliance with anti-money laundering rules. According to the investigation, the bank gave access to terrorists and drug lords to the U.S. banking system.