In a statement, which confirmed press reports, the bank said “fewer than 3%” of its total workforce of more than 12,000 in the region would be affected by the cuts, and it stressed that the Middle East is still "a core part of the HSBC Group’s emerging market strategy” and its commitment there “remains undiminished”.
“As part of a standard operational review of the business to ensure our competitiveness, we have identified an opportunity to improve efficiency through a small reduction of headcount,” the statement continued.
“Regular refinement of the business to enhance operational excellence and ensure value for our customers and shareholders is an ongoing process at HSBC, designed to strengthen our business for future success.”
HSBC said it was aware that the proposed changes would “be difficult for members of staff impacted”, and that it therefore would “do everything we can to support those affected”.
The statement did not address the matter of the recent unrest in the MENA region, which is understood to have affected both business and sentiment, particularly in Bahrain, where HSBC has a number of retail branches.
The news comes days after the bank revealed it was planning to close its retail banking operations in Russia and reduce its private banking presence to a representative office. This announcement also followed a strategic review that HSBC Russia chief executive Huseyin Ozkaya said had revealed the bank’s “strongest opportunity in Russia lies in servicing corporate and institutional clients”.
It also comes just months after Stuart Gulliver took over as chief executive of the HSBC Group from Michael Geoghegan. While some might see the recently-announced cuts as classic “kitchen-sinking” by a new CEO, unnamed HSBC officials quoted in some publications stressed that they were not connected with any broad corporate strategy, or to a strategic update Gulliver is due to present on 11 May.
56% headcount rise over five years
HSBC currently employs more than 12,000 people in the MENA region, compared to just 7,700 in 2006 – a sign, the bank noted in its statement, of the investment it has made in the MENA region over the last five years.
Last year HSBC’s Middle East operation contributed a pre-tax profit to its parent of $892m, up from $455m in 2009, according to its annual report. This represented around 4.7% of the total, down from 6.4% in the year-earlier period.
