* Cuts paused after virus now "more necessary"
* Bosses looking to bolster business for 2021
* Axed staff will remain paid for much of 2020
(Adds details)
By Lawrence White and Sinead Cruise
LONDON, June 17 (Reuters) - HSBC is resuming a
redundancy plan it put on ice after the coronavirus outbreak,
and will cut around 35,000 jobs over the medium term, a memo
seen by Reuters on Wednesday showed.
The bank will also maintain a freeze on almost all external
recruitment, Chief Executive Noel Quinn said in the memo, which
was sent to HSBC's 235,000 staff worldwide.
"We could not pause the job losses indefinitely - it was
always a question of 'not if, but when'," Quinn said, adding
that the measures first announced by HSBC in February were "even
more necessary today".
A bank spokeswoman confirmed the contents of the memo.
HSBC had postponed the job cuts, part of a wider
restructuring to cut $4.5 billion in costs, in March saying the
extraordinary circumstances of the coronavirus pandemic meant it
would be wrong to push staff out.
Quinn said it now has to resume the programme as profits
fall and economic forecasts point to a challenging time ahead,
adding that he had asked senior executives to look at ways to
cut more costs in the second half of the year.
The bulk of the job losses are likely to fall in back office
roles in HSBC's Global Banking and Markets division, which
houses its investment banking and trading businesses, a senior
HSBC executive familiar with the plans said.
HSBC sees natural attrition of up to 25,000 roles each year
but redeploying all affected staff to those roles was
unrealistic, the executive said.
Shares in HSBC have fallen 27% since the start of March,
with the pandemic prompting it to set aside $3 billion in bad
loan provisions in its first quarter earnings.
Under the initial plan, HSBC said it would merge its private
banking and wealth business, pare back its European equity
business and reduce its U.S. retail network.
Shares in Europe's biggest bank, which has come under fire
from lawmakers on both sides of the Atlantic for its support for
a new security law in Hong Kong, rose by 0.5% in London on
Wednesday.
(Editing by Rachel Armstrong, Clarence Fernandez and Alexander
Smith)
HSBC Holdings (HSBA)
