• HSBC announces global job cuts as part of a $1.5 billion cost-reduction plan by 2026

• The bank will reduce global staff costs by 8%, with senior roles most affected

• HSBC also delays its climate target to reach net-zero emissions from 2030 to 2050

• The bank will review its 2030 targets for emissions linked to financing polluting companies

• HSBC remains a member of the Net Zero Banking Alliance but may reconsider its membership

The UK’s largest bank has announced it will begin a round of global job cuts as part of a cost-cutting initiative aimed at reducing expenses by $1.5 billion (£1.2 billion) by the end of 2026.

HSBC plans to cut global staff costs by 8%, with senior managers and employees within its newly merged wholesale corporate and institutional division most likely to be impacted.

The bank did not specify how many jobs would be lost or provide a country-specific breakdown; group CEO Georges Elhedery said that the bank is not focusing on headcount reduction but on overall cost savings.

He added that the global workforce of 211,300 will not decrease by 8%, as the majority of cuts will affect senior, higher-paid roles, but confirmed that the UK's head office will experience the greatest impact.

The group will eliminate positions that have become redundant following its recent restructuring, which involved splitting into eastern and western units and merging two of its three main divisions, thereby removing a layer of senior bankers.

HSBC is also scaling back its mergers and acquisitions banking operations in the UK, Europe, and the US. But what does it mean for the bank’s operations in the UK, and will the news lead to the closure of any physical bank branches?

Will HSBC close bank branches?

While the news about job cuts and restructuring indicates a focus on cost reductions and streamlining operations, there hasn’t been a direct mention from HSBC of physical bank branch closures in the UK.

Of course, it is possible that some branches could be affected in the longer term, given the bank’s move to reduce costs and consolidate operations, though there have been no clear announcements on closures specifically tied to these recent cuts.

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HSBC, like many banks, has been increasingly focusing on digital services, which has led to a decline in foot traffic to physical branches. If this trend continues, the bank may reduce its physical presence.

As HSBC aims to cut costs, consolidating branches in areas with lower foot traffic or moving towards more digital-first models could be a natural outcome.

The recent cuts are expected to primarily impact more senior roles, especially in management, and the focus seems to be on trimming senior positions rather than frontline branch staff.

Has HSBC cut back on net-zero plans?

The news of sweeping job cuts comes on the same day as HSBC announced it had delayed its climate target to cut emissions from its operations and supply chain by 20 years.

In its annual results released on Wednesday (February 19), the bank revealed major updates to its strategy for achieving net-zero emissions by 2050.

HSBC initially set an interim target in 2020 to reach net zero across its operations and supply chain by 2030, using 2019 levels as a baseline. It now plans to meet this target by 2050.

In a move that could have a significant impact on its climate goals, HSBC also announced it will review its 2030 targets for reducing emissions linked to financing polluting companies.

The bank has previously recognised its “heavy financed emissions footprint” and set sector-specific targets to reduce lending to industries such as oil and gas, power and utilities, cement, aviation, and steel in recent years.

It plans to release the results of the 2030 targets review later this year. Unveiling the annual results, Elhedery told reporters: “It’s completely reasonable that we take stock halfway into (our net zero reduction plan).”

As US banks withdraw from the Net Zero Banking Alliance, Elhedery said that HSBC remains a member of the climate industry group, but did not respond when asked whether the bank would leave following updates to its green plans.

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