Financial services firm HSBC has announced job cuts of around 35,000 after its 2019 profits declined by about a third compared to the previous year.
The dramatic decrease in profits has prompted HSBC to cut costs amounting to $4.5 billion by 2022, triggering the job cuts. As part of a major restructuring, the bank's interim chief executive officer (CEO) Noel Quinn said the company would reduce its total workforce from 235,000 to about 200,000 over the next three years.
HSBC, which gets most of its revenue from Asia, posted an annual profit before tax of $13.35 billion for the year. The company attributed the decline to  $7.3 billion in write-offs related to its investment and commercial banking operations in Europe.
The announced 35,000 job cuts, which represent 15% of the total workforce, far exceeded analysts' forecast of around 10,000 in workforce reduction. HSBC currently operates in over 50 countries across North America, Europe, the Middle East and Asia, employing more than 40,000 people in the UK, where its headquarters is located.
Among those 40,000, around 10,000 are based at its head office in Canary Wharf in London while another 2,000 are located at its new UK head office in Birmingham. HSBC has mentioned that some of the job cuts will be in its European and US investment banking businesses.
Peter Hahn, banking expert and former dean of the London Institute of Banking & Finance, pointed out: "I think they were too optimistic about their chances of their success in investment banking."
"The reality is that the biggest investment market in the world is the US, and if you're not big in the US in investment banking it's pretty tough to succeed in that business - and they're not," he added.
The change in strategy comes amidst a slowdown in the economic growth of the company's major markets, particularly Asia, which comprises about half of its revenue and 90% of its profits.
