Just days after JPMorgan revealed it would fire another 5,000 by the end of the year in a "scalpel" headcount reduction, overnight the world's favorite drug money laundering bank HSBC unleashed the "machete" and announced it would cut almost 50,000 workers, or one in five bankers, a move which would shrink the investment bank division by one-third. The reason: the same why US corporations are laying off tens of thousands so they can fund record stock buybacks and enrich their shareholders - to boost profits so that more money can be channeled in the form of dividends.

According to Reuters, the bank's second big overhaul since the financial crisis "will speed up a cull of unprofitable units and countries by cutting almost 50,000 jobs - half of them from selling businesses in Brazil and Turkey." Gulliver warned that its decision to sell its businesses in Turkey and Brazil, where it had failed to gain scale, showed that HSBC "had no sacred cows".

Considering these countries are either deeply in recession or on the cusp, the massively layoffs will likely have a profound macro impact on the regional economies.

It will cut its assets by a quarter, or $290 billion on a risk adjusted basis (RWA) by 2017, and slice $140 billion from its investment bank which will subsequently make up less than a third of HSBC's balance sheet from 40 percent now.

But while the pink slips galore, shareholders will be happy:

Gulliver also pledged higher payouts for investors. "I believe that we are in the foothills of another prolonged period of dividend growth for the firm," he said. He noted that the bank's dividend had grown from 17 years from 1991 to 2008.

Still, some are getting skeptical that one can grow cash flows by massive attrition:

But investors were cautious about how HSBC would translate job cuts into meaningful savings given the higher cost of doing business in a tougher post-crisis business environment marked by new rules on risk and compliance. "Slaughtering the staff is not necessarily the solution unless management makes the bank considerably less complex," said James Antos, analyst at Mizuho Securities Asia.

The stock suggested as much when HSBC shares dipped 0.1% in the aftermath of the announcement, pressured also by disappointment about the bank's decision to lower its target for return on equity to greater than 10 percent by 2017, down from a previous target of 12-15 percent by 2016.

Some more details on who gets the machete, or rather, the axe:

In addition to the jobs lost through disposals, others will be cut by consolidating IT and back office operations, and closing branches. Gulliver said about 7,000-8,000 job cuts would be in Britain, or one in six UK staff. The UK retail banking business would also be rebranded to meet new rules designed to ringfence customer deposits from riskier investment banking operations. Gulliver said it was too early to say whether the group would keep the ring-fenced bank, which will be headquartered in the English city of Birmingham and account for about two thirds of UK revenues, or $11 billion.

Finally, on a very sensitive topic to the UK in recent months, HSBC also set out 11 criteria for helping it decide whether to move its headquarters from London to Asia, likely Hong Kong. "They include factors such as economic growth, the tax system, government support for the growth of the banking system, long-term stability and an ability to attract good staff. HSBC said it would complete the review of the possible move by the end of the year."

The bottom line: HSBC will push through annual cost savings of up to $5 billion by 2017. It will cost up to $4.5 billion in the next three years to achieve the savings. In other words, HSBC will report massive GAAP losses and hope analysts give it credit for billions in non-GAAP addbacks.

The problem is that even this practice of endless adjustments to bottom line EPS is getting increasingly more scrutinty as explained in "The Non-GAAP Revulsion Arrives: Experts Throw Up All Over "Made Up, Phony, Smoke And Mirrors" Numbers" because sooner or later someone will realize that when "one-time, non-recurring" charges, settlements and costs are recurring and non one-time, then it is merely ordinary course of business, which also means that what on paper are record profits are in GAAP reality massive losses.

Oh, and before we forget: what better way to celebrate a global "recovery" than by laying off 20% of one's workforce?