HSBC’s layoffs may shift more offshore work to India, China
Asia Unhedged notes that in a volatile global economy, one nation’s bust is another’s boon.
HSBC’s Tuesday announcement that it plans to cut up to 25,000 jobs overseas will have a minimal impact on the British lender’s India-based operations, according to a report in the Economic Times. It could even boost the institution’s software engineering development and back office work in India and China as part of a cost-saving move.
The bank reportedly said in an investor presentation said that it will raise the level of software engineering activities in India and China to 75% by 2017 from a current 50%. The step may save up to $525 million.
The Economic Times says that out of 32,000 employees of HSBC in India, as many as over 27,000 are posted in back offices and development centers spread across Pune, Hyderabad, Vishakapatnam, Kolkata, Bangalore and Delhi. There are another 5,000 employees in HSBC’s India-based banking, asset management and insurance operations.
An HSBC official cautions that the bank is still assessing the impact of its worldwide staff cuts on offshore operations in India.
“It is too early to speak of the impact (of the global cost cutting measures). If anything, it will be minimal in nature here. It could also be positive as Asia has been identified as a focus market and moreover India is a priority market for us,” an HSBC India official was quoted as saying.
HSBC says it plans to slash nearly one in five jobs and shrink its investment bank by a third to offset sluggish growth in its units worldwide. The plan includes slashing nearly 50,000 jobs — half of them from selling businesses in Brazil and Turkey.