HSBC rules out large scale job cuts in India
A day after announcing trimming its global workforce by 30,000, banking major HSBC Tuesday ruled out any significant job cuts in India, a strategic market where it is fighting high attrition rate.
Responding to a question on whether job cuts announced by the global management Monday would apply to India, HSBC India Chief Executive Stuart A Davis told reporters, "I think India already has a very high attrition rate. We are hard- pressed to even catch up on the replacements."
"There is a war for talent out there, (however) as I said, there will be reallocation of resources."
He said re-allocation of resources is not going to be a job cuts. "I hate the word cut heads. What we are trying to do is to eliminate bureaucracies at the back-end," he added.
Davis further said that reallocation of resources means that if there are too much of bureaucracies at the back-end, what is needed is streamlining the back-end and use the resources in the front-end.
"All countries in the APAC will follow the same principle as the rest of the world, but I think as far as India is concerned, being classified as a strategic market, the treatment will be different," Davis said.
HSBC has 50 branches across the country employing about 6,000 people.
"As far as India is concerned, I won't be overly concerned. The important thing is that both India and China are classified as strategic markets. So we will continue to feel for India and China," he said.
"But generally speaking, we will eliminate as much bureaucracies at the back end as possible by streamlining operations and our IT systems. But we will continue to grow at the front-line," Davis added.
He also hinted at more hiring if the economy continues to grow the way it is. "If GDP is going to grow at 7.5 percent, I think India is probably to be at that range also, then I have to say the head-count will probably go up. But I cannot guarantee that every single part of India operations is going to grow," Davis concluded.
The bank had yesterday said it had already cut 5,000 jobs following restructuring of operations in Latin America, the US, Britain, France and the Middle East and that it would cut another 25,000 between now and 2013, according to media reports.
HSBC India, the fully-owned subsidiary of the largest European bank, reported a 33 percent rise in pre-tax profit to USD 451 million from the country, making this unit the sixth most profitable regional for the British lender.
Even after reporting a surprise 5 percent rise in first-half pretax profit of USD 11.5 billion yesterday, HSBC, which is the largest bank in Europe, had said it would shed 30,000 jobs as it retreats from countries where it is struggling to compete.
HSBC had said on Sunday it would sell 195 US branches to First Niagara Financial for about USD 1 billion in cash, and close another 13 of the 470 sites it had. HSBC also intends to sell its US credit card portfolio, which has over USD 30 billion in assets to free up capital. The bank now aims to shut or sell retail operations in a further 20 countries.
However, it can be noted that mid-July, the bank had announced some redeployment of its loan recovery staff, which would involve around 150 people getting relocated elsewhere in the bank or those failing in that effort losing the job.
"As part of our revamp process, we did in fact ask the employees in our loan recovery section to find new jobs within the bank," an HSBC India spokesperson had told PTI on July 18.
Last month, another British bank Barclays had also announced merger of its client relationship teams in Barclays Corporate and Barclays Capital, which would result in a job loss of around 25 people.