HSBC will axe up to 25,000 jobs globally in its bid to save up to $5 billion a year, the banking giant said on Tuesday as it unveiled a new global strategy that will see more IT operations shifted to India.

The bank will cut 20,000-25,000 jobs globally — just under 10 per cent of its 2,66,000 strong workforce — CEO Stuart Gulliver said during an investor presentation.

The bank declined to comment on which countries the job losses would be in — aside from the UK, where 6,000-8,000 jobs are expected to be axed.

As part of a wider review of its IT strategy, the bank will shift more of its software engineering operations to India and China. They will account for 75 per cent of such functions, from current levels of 50 per cent. This is expected to lead to savings of $475-525 million.

Action plan

As part of a 10-point action plan, that will remove the “biggest drags on the business”, HSBC will sell businesses in Turkey and Brazil (with further job losses in the region of 25,000), and take steps to revamp the US and Mexican businesses, as well as cut branches in its seven key markets.

It will ramp up investments and presence in Asia, particularly the Guangdong region of China, ASEAN countries, including Singapore, Malaysia, and Indonesia, as well as expanding its Asian insurance businesses, reflecting the high growth and the central role it expects the region to play in global trade and financial services in coming decades.

“We are uniquely positioned to take advantage of opportunities in Asia,” Gulliver said. “We recognise that the world has changed and we need to change with it.”

The board of HSBC is also likely to make a decision on whether to move the bank’s headquarters out of the UK by the year-end, Gulliver said.

A new location, if chosen, would have to meet a number of criteria, including providing a competitive, business-friendly environment, a respected regulatory system and a fair and competitive tax system, he said.

Cost-saving steps

As a result of its actions, HSBC plans to reduce its risk weighted assets of $290 billion by around 25 per cent, achieving annual cost savings of $4.5-5 billion by 2017. The cost of the programme will amount to around $4.5 billion. Shares of HSBC were down 1 per cent in early afternoon trading in London.

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