HSBC to freeze hiring, limits bankers’ travel in cost-cutting drive: Report

HSBC Holdings Plc is slowing down hiring and instructing investment bankers to cut back on travel and entertainment expenses as outgoing Chief Executive Officer Noel Quinn aims to reduce costs at Europe’s largest lender, according to Bloomberg report.

In some cases, the bank is not replacing staff who have left or resigned in recent months, according to sources familiar with the situation. Certain business units have been instructed to pause hiring altogether, although this freeze is not intended to affect client-facing roles, sources were quoted as saying by Bloomberg.

Investment bankers have been encouraged to schedule at least three client meetings per day to maximize the value of work travel, the sources added. Additionally, employees in some divisions were recently reminded of the expectations regarding work travel during a company town hall meeting.

“Servicing our clients is our priority and ensuring we have the right people in the right places. We are working smarter and more efficiently as we leverage technology and continue to manage costs,” sources were quoted as saying Bloomberg.

HSBC’s recent cost-cutting measures indicate that lenders are beginning to prepare for central banks around the world to start lowering interest rates in the coming months. This would mark the end of an era of persistently high rates that have boosted the profits of large global banks like HSBC in recent years.

CEO Noel Quinn is also preparing the lender for a leadership transition after announcing his plans to step down earlier this year. The company’s board of directors aims to complete the search for his successor within the next few weeks.

In the meantime, Quinn, a 37-year veteran of the bank, is focused on stabilizing HSBC’s finances. The bank is expected to report second-quarter earnings later this month, with anticipated revenue of $16.1 billion, a 4.9% decline from a year ago. Profits are also expected to decrease.

Within its investment banking sector, HSBC has implemented significant cost-cutting measures amid a broader industry slump in deal making and capital markets activity. In April, the London-based bank dismissed about a dozen bankers across its investment banking division in Asia.

HSBC’s deal making efforts have faced challenges, particularly in its core markets of Hong Kong and China, where economic activity remains sluggish as the world’s second-largest economy struggles to regain stability post-pandemic.