HSBC job cut to have minimum impact on India
British lender HSBC on Tuesday said its decision to cut 25,000 jobs globally will have minimal impact in India and may even bring in some benefits.business Updated: Jun 10, 2015 13:20 IST
HSBC's decision to cull upto 50,000 jobs globally is expected to be minimal for its operations in India and some surprise benefits may also come in.
The British lender announced on Tuesday that it will shed almost 50,000 jobs and take an axe to its investment bank, cutting its assets by a quarter in a bid to simplify and improve its sluggish performance.
The surprise could be in the form of the bank's target to increase its software engineering development and back office work in India and China as part of its move to consolidate this vertical, which is projected to save up to $525 million over the next two years.
However, it could not be ascertained what the current share of India in the bank's overall offshoring work is. "It is too early to speak of the impact (of the global cost cutting measures). If anything, it will be minimal in nature here. It could also be positive as Asia has been identified as a focus market and moreover India is a priority market for us," an HSBC India official told PTI.
The bank in an investor presentation said that it will increase software engineering carried out in India and China to 75% by 2017 from the present 50%, which could help it save up to $525 million.
According to estimates, out of the 32,000 employees of HSBC in India, as many as over 27,000 are employed in the back offices and development centres spread across Pune, Hyderabad, Vishakapatnam, Kolkata, Bangalore and Delhi.
It has another 5,000 employees in the banking, asset management and insurance space in the country.The bank said it will cut the staffing in investment banking by a third in this effort to improve efficiencies,which is aimed at cutting costs by up to $ 5 billion by 2017.
According to the official, the bank employs only under 20 in the equity capital markets and i-banking divisions and an equal number at its debt capital markets division in the country.
In fact, last year the bank added as many as 1,000 heads in India to 32,000, which was the second highest after England.Earlier in the day, HSBC Holdings said it would cull up to 25,000 jobs across the world, including 8,000 in its struggling home market, to reduce costs and shift its centreof gravity back towards the fast-growing Asian economies where it started operations 150 years ago.
"Asia is expected to show high growth and become the centre of global trade over the next decade. We recognise that the world has changed and we need to change with it," group chief executive Stuart Gulliver said.
In an investor presentation, the bank identified India among focus areas where it intends to grow, along with others countries like Australia, Canada, Egypt and Taiwan.