September 8th, 2011
06:45 AM GMT
(CNN) – The summer bloodletting from multinational banks isn’t over.
HSBC, a huge employer in Hong Kong and an anchor in a city known as Asia’s financial hub, announced that 3,000 people – roughly 10% of its workforce – will be out of a job by 2013.
The cuts are part of HSBC’s plans to eliminate 30,000 positions worldwide.
HSBC employees won’t be alone hitting the bricks with resumes in hand. This week, the Charlotte Observer – the hometown paper for Bank of America – wrote the largest bank in the U.S. plans to shed between 25,000 and 30,000 jobs.
Last week, Dutch bank ABN Amro said it will cut 2,350 jobs. In Stockholm, Nordea, the largest bank in the Nordic region, plans to cut 2,000 workers. The week before Swiss bank UBS announced 3,500 job cuts.
Other layoffs reported in recent months:
Lloyds TSB – 15,000 jobs
Barclays PLC – 3000 jobs
Credit Suisse – 2000 jobs
RBS – 2000 jobs
Wells Fargo & Co. – 1,900 jobs
Bank of New York Mellon – 1,500 jobs
Goldman Sachs – 1000 jobs
Why? As stock prices sink, banks are looking for ways to boost their bottom lines – and nothing is faster than cutting staff. Employees represent around 60% of a bank’s expenses, and a payroll cut is instant money left in the banks.
The spiraling debt problems in Europe have global investors worried about the economic health of banks there; Swiss banks like UBS and Credit Suisse were pummeled by the strong Swiss franc. Fears are profound that a euro contagion could jump the Atlantic, and all are jittery about a double-dip recession.
Another reason, as Andrew Ross Sorkin at the New York Times pointed out: Reduction of those banker bonuses that caused such uproar in the wake of the financial crisis. Instead, banks have increased salaries to compensate, Sorkin explains. But unlike bonuses, which could be adjusted based on a bank’s financial performance, salaries are a fixed cost.
So rather than axe bonuses, banks are axing bankers.
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