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October 17, 2003
HSBC, Britain's biggest bank, will shed 4,000 jobs in the UK in the next two and a half years by shifting processing and call centre jobs to Asia in a bid to slash costs.
The move will mean the closure of four of HSBC's centres, in Sheffield, Birmingham, Swansea and Brentwood in Essex. HSBC will add new centres to ones it already has in India, Malaysia and China.
The move - the single largest outsourcing of jobs to Asia by a British company - accelerates what has already become a familiar trend in the past couple of years. A series of large employers, including almost all of Britain's largest banks, have shifted operations to Asian countries or have said they are thinking seriously about doing so. Those already to set up major operations in the area include BT, ebookers and Prudential.
Financial union Unifi reacted furiously to HSBC's decision, which comes after its announcement earlier this year to slash 1,400 jobs from its UK head office.
Rob O'Neill, a Unifi official, said: "The gloves are off. Unifi has managed so far to ensure there have been no compulsory sackings but the "world's local bank" has shown that if the job can be done cheaper somewhere else then they will move it. It is profit before people."
Mr O'Neill vowed to fight the move "tooth and nail". HSBC plans to make 1,500 people redundant next year, with a further 2,000 to go in 2005. The remaining 500 will be cut in 2006. A spokesperson for HSBC said the bank "completely understood" the trauma the plan could cause its employees. It has set aside £4m to finance counselling and career advice to those who wish to take it up.
HSBC added it would try to keep compulsory redundancies to an "absolute minimum" by not replacing staff who leave and by offering people other positions at the bank where appropriate. It said less than 5 per cent of the head office jobs to go were downsized through compulsory redundancies.
HSBC justified its decision on the basis that places such as India are much more cost effective because salaries are so much lower than in Britain.
"We are an international business and have a responsibility to manage ourselves internationally.
"There are completely different cost ratios overseas and if we did not take advantage of that we would not be being responsible to our shareholders," the spokesperson said.
HSBC employs 218,000 globally, including 53,000 in the UK. The bank, which has its roots in Britain's colonial past as the foremost bank in Hong Kong, has operated in China for 138 years and in India for 150 years.
The bank has already established a number of high-tech call centres, in places such as Hyderabad in India.
HSBC said it continued to be committed to the UK, where it is listed as well as Hong Kong. Last year Europe contributed one-third of HSBC's profits, but its management believes it must shave costs from this part of the business.