Unions react angrily to news of 8,000 job losses in UK as they say frontline staff are being made to pay for the mistakes of others

HSBC is to axe 25,000 jobs around the world – including up to 8,000 in the UK – in a shakeup that will also spell the end of the bank’s trademark red and white hexagonal logo on UK high streets.

Stuart Gulliver, chief executive of Britain’s biggest bank, said customers and staff would be consulted on a new name for the 1,000-strong branch network in the UK, and that it was too soon to say whether HSBC would retain ownership of the operation.

Since taking the helm in 2011, Gulliver has cut the workforce from 296,000 to 257,000 and has signalled another 25,000 reductions to turn the bank’s focus towards Asian markets and adopt digital technology. Another 25,000 jobs will go from the workforce through the sell-off of Turkey and Brazil.

About 8,000 UK jobs – one in six of the bank’s British workforce – are to go, a move that infuriated unions. “After all the scandals of recent years, frontline staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation,” Dominic Hook, Unite’s national officer for finance, said.

Gulliver also set out the criteria the bank will use to decide whether to keep its headquarters in the UK, where it has been based since 1992 when it moved from Hong Kong to enable the takeover of Midland bank. A decision will be made by the end of the year. Analysts at Shore Capital said: “Hong Kong and Canada were mooted by management as possible locations.”

Analysts at Investec said: “We think the financial logic for HSBC to escape the clutches of the UK (and Europe) is overwhelming. What possible reason is there to stay?”

The job cuts are not part of that review, which will kickstart a debate about the government’s tax policy and attitude to financial services companies – two of the 11 factors HSBC will use to determine whether to stay based in London. The UK bank levy, which costs HSBC £700m a year, will be part of its decision and has prompted speculation that the chancellor, George Osborne, could launch a review of the measure in his Mansion House speech on Wednesday.

Regulatory changes already under way mean that HSBC is also setting up new operations in Birmingham for the local head office of its “ringfenced bank”. All banks must comply with rules coming into force into 2019 to have a ringfence separating their high street operations and their riskier investment banking business.

This Birmingham-based bank will employ 26,000 staff and will not use the HSBC name, which appeared on the UK high street about 15 years ago when Midland’s griffin logo was replaced. The Midland name could now be resurrected. Gulliver said the ringfencing rules required a rebranding so customers to be able to differentiate between the ringfenced and non-ringfenced bank – though this fuelled speculation he would sell the UK arm.

The hexagonal logo is a familiar sight across the world, and adorns every airbridge at Heathrow airport.

Stuart Gulliver, HSBC chief executive. Photograph: Bloomberg/Getty Images

His strategy review, entitled Actions to capture value from our global presence in a changed world, involved what he described as a significant reshaping of the business, to achieve global cost-savings of $5bn (£3.3bn). Operations in Turkey and Brazil will be sold– although a small presence will be maintained in Brazil. The Mexican and US businesses, which Gulliver had previously described as underperforming, will be retained.

He blamed the bank’s weak performance on those four troublesome countries – along with the UK, which had been plagued by fines and compensation costs. The bank said it had incurred $11.2bn of regulatory charges in the last four years, about $5.7bn of which are related to the mis-selling of payment protection insurance. The number of staff working in compliance has more than doubled, from 3,200 to 7,200.

We recognise the world has changed and we need to change with it. Stuart Gulliver

While he is overhauling the bank, he is not changing its structure. To make the case against breaking up the bank, he said the current structure generated $22bn of revenue.

“HSBC has an unrivalled global position: access to high-growth markets; a diversified universal banking model with strong funding and a low-risk profile; and strong internal capital generation with industry-leading dividends,” Gulliver said.

But he added: “We recognise the world has changed and we need to change with it.”

The investment banking arm will also shrink to use less of its global balance sheet, from almost 40% to nearer 33%, in a move intended to not only bolster performance but “reduce the risk of further fines and conduct redress penalties”.

As soon as he took the helm in 2011 after a lengthy career with HSBC, Gulliver pulled back from the bank’s strategy to be the “world’s local bank” and retrenched from a presence in 87 countries or territories to 73.



He also introduced the motto of “courageous integrity” – the purpose of which became clearer after the bank was slapped with a £1.2bn fine the following year by US authorities over laundering money for Mexican drug barons. Since then it has been embroiled in the foreign exchange-rigging debacle and more recently a tax-avoidance scandal after the leak of account details of customers of its Swiss banking arm to the Guardian and other publications.

In a five hour presentation, he set out how the bank is shifting its focus to the faster growing economies of Asia.

Gulliver set out a 10-point plan for the coming years as he reshapes the business. While investment is being pulled back from developed economies, he is accelerating growth plans in the Pearl River Delta near Hong Kong and Macau, and other parts of Asia.

“We believe the world’s economy will move to the east,” said Gulliver, speaking from London.