News: The bank will relocate the IT jobs to Poland, China and India.
Global banking giant HSBC is cutting 840 IT jobs in the UK, as part of its planned restructuring that would see 8,000 of its employees losing jobs in the country by the end of 2017.
HSBC plans to remove 595 IT workers in Sheffield and 245 people working in IT departments at its offices in London, Leeds and Birmingham.
HSBC UK chief operating officer John Hackett was quoted by The Guardian as saying: “As part of a global relocation exercise, around 840 non-customer-facing IT roles will transfer from the UK to other sites around the world by the end of March 2017. The UK will continue to play an important role in HSBC’s global IT infrastructure, employing several thousand IT professionals.”
In 2015, the lender initiated a three-year restructuring plan to close underperforming business units in order to improve its earnings, where were weighed down by a rise in compliance costs, penalties, and low interest rates.
The cost cutting plan was aimed at reducing its UK headcount by one-sixth. It employed around 47,000 people in Britain by the end of December 2015.
It had also announced a freeze on hiring and pay for all of its global units until the end of 2016. Overall, it plans to reduce costs by $5bn by the end of next year.
However, in January, the bank withdrew its plans to put a freeze on pay revisions after facing criticism from its employees, Independent reported.
The IT job cuts have angered the trade union for UK bank workers, who feel “devastated” for being asked to train overseas successors before they leave the organisation.
HSBC expects the majority of impacted staff to leave the bank by the end of the year, the union said.
The union said that many of the IT workers will be expected to impart training to the recruits based in ‘low cost’ countries in a ‘cynical race to the bottom’.
Unite’s national officer for finance Dominic Hook said: “HSBC’s decision to axe so many IT jobs is as ruthless as it is reckless. For almost a year staff have been left in the dark about their futures, only to be told that before being shown the door they’re expected to train someone in India or China who will do their job for less money.
“It’s a deeply cynical move by a bank which wants to be an ’employer of choice’.
“Offshoring IT jobs to so-called ‘low-cost economies’ is extremely short-sighted. As IT glitches across the banks continue to prove, it is ultimately the customers who will suffer the consequences.
“Unite will continue to support our members throughout this process and work with our sister international trade unions to end this cynical race to the bottom.”
The bank’s profit declined 18% fall in the first quarter this year, as volatile conditions in the global markets hurt its revenue performance in the first two months of 2016.
Profit earned by Britain’s biggest bank dropped to $4.3bn in the March quarter from $5.26bn in the same quarter a year earlier. Its revenue fell by 5.8% to $14.98bn, as its clients’ activity was hit by uncertainty in the markets.
Earlier this year, the bank announced to keep its headquarters in London after contemplating to shift it to Hong Kong in a bid to escape from the huge taxes imposed by the UK authorities.