HSBC is imposing a 10% pay cut on about 500 contractors in their global investment banking operation as well as constraining them to take an unpaid holiday for two weeks as they battle the rate of rising costs.
This could be a sign that thousands of jobs and billions of pounds worth of assets in the London-based global bank are set to be slashed.
Earlier this year, HSBC presented investors with a strategy named ‘Pivot to Asia’, which promises to diminish poorly performing operations in Europe and using these cutbacks to supply resources to more promising markets.
Although, this strategy failed to impress many investors who held concerns that the bank was being too timid in their cutting efforts. This has caused questions to many of those investors as shares have fallen 16 per cent this year, underperforming many big rivals.
Contract workers in the investment bank who face cuts mostly work in the UK and includes hundreds of IT workers, analysts and others on fixed-term contracts who were informed that their pay would change as of the beginning of the following month.
In a statement, HSBC commented:
“As a routine practice in global banking and markets, we regularly review rates for contractors to ensure alignment with the market and manage costs.”
The bank revealed plans to shed 50,000 jobs globally over the course of the next two years by closing retail branches and reducing the size of its investment bank.
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