HSBC to axe 30,000 jobs, posts bumper profits

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HSBC will slash 30,000 jobs worldwide over the next two years as part of a major cost-cutting drive aimed at refocussing on Asia, the global banking giant said on Monday as it posted bumper profits.

HSBC revealed in a results statement that it was in the process of cutting its global headcount by 5,000 workers but new chief executive Stuart Gulliver revealed that the cost-cutting plans would go deeper.

"There will be further job cuts," Gulliver told journalists on a conference call after the group announced a large 35-percent jump in net profits.

"Another 25,000 roles will be eliminated in addition to the 5,000 already announced," he added.

The cuts represent about 10 percent of HSBC's current global workforce but Gulliver stressed that the group would also be recruiting staff by 2013.

"The net number will be a lot smaller than the 30,000," he told reporters.

HSBC had said it would axe 5,000 jobs as a result of operational restructuring in Latin America, the US, Britain, France and the Middle East.

The job cuts are part of the group's already-announced plans to slash costs by up to $3.5 billion (2.4 billion euros) within two years.

The British lender, which survived the 2008 crisis without state aid unlike many of its rivals, announced in a strategic review in May to save $2.5-3.5 billion in costs by 2013.

Gulliver, who took the reins in January, aims to re-invest the enormous cost savings into fast-growing markets around the world, notably Asia.

"We will end up continuing to grow our headcount in emerging markets," he said on Monday, as HSBC revealed that its net profit soared 35 percent to $8.9 billion (6.2 billion euros) in the first half compared with the first six months of 2010 on lower tax charges.

Pre-tax profits rose 3.3 percent to $370 million in the reporting period, while total revenues edged ahead to $35.7 billion.

"I am pleased with these results, which mark a first step in the right direction on what will be a long journey," Gulliver said.

In reaction, HSBC's share price rallied 4.46 percent to 621 pence in morning deals on London's FTSE 100 index of leading shares. The FTSE jumped 1.30 percent to 5,890.72 points amid investor relief over a political debt deal in Washington.

"The company continues to benefit from a global diversification which is not necessarily matched by the other UK banks," said Hargreaves Lansdown analyst Richard Hunter.

"Cost cutting and prudent growth management through its retail and commercial operations have been contributors to the upward surprise, whilst the bad loan figures have reduced impressively."

© 2011 AFP

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