LONDON - HSBC, Europe’s biggest bank, plans to announce thousands of job cuts today as part of a wide-ranging cost-reduction program that started in May, a person with direct knowledge of the decision said yesterday.
HSBC plans to cut about 10,000 jobs, or 3 percent of its global workforce, said the person, who declined to be identified. HSBC is expected to announce the cuts when it reports earnings for the first half of this year today. HSBC declined to comment.
Also yesterday, the bank announced that it would sell 195 of its branches in upstate New York to the First Niagara Financial Group for about $1 billion. The branches being sold hold about $15 billion in deposits.
Stuart T. Gulliver, who took over as HSBC’s chief executive in January, said in May that he was seeking to lower costs by $2.5 billion in the next two to three years mainly by scaling back the bank’s retail operations outside Britain. HSBC said in May that it might also sell its bank card business in the United States.
Gulliver has said that he plans to radically change HSBC’s business in the United States, which has been a drag on group earnings mainly because of an ill-advised acquisition of subprime lender Household International in 2003. Gulliver has said he hopes to strengthen the business by winning market share with its commercial banking unit.
First Niagara’s deal to purchase the HSBC branches in upstate New York would more than double its branch network in the region. As of Dec. 31, the firm, based in Buffalo, had 115 branches in upstate New York and 257 in total.
HSBC also plans to consolidate 13 of its branches in Connecticut and New Jersey into nearby existing locations.
HSBC’s pretax profit for the six months through June is expected to fall to $10.9 billion from $11.1 billion last year, according to the average of analyst forecasts polled by Reuters.