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HSBC to Cut 840 IT Jobs in UK & Move them to Low Cost Sites

As part of its previously announced strategic overhaul aimed at boosting profitability and overall efficiency, HSBC Holdings plc HSBC will axe 840 information technology jobs in the U.K. and move them overseas.

The jobs, most of which are in Sheffield, Tankersley and London, will be relocated to lower-cost countries like India, China and Poland by Apr 2017.

John Hackett, chief operation officer at HSBC UK, said: “As part of a global relocation exercise, around 840 non-customer-facing IT roles will transfer from the UK to other sites around the world by the end of March 2017.”

“The UK will continue to play an important role in HSBC’s global IT infrastructure, employing several thousand IT professionals,” he added.

This move by Europe's largest bank comes on the heels of its plan to eliminate 8,000 British jobs by the end of next year. This is part of the bank’s restructuring and cost-cutting measures announced in 2015, which aim to cut $5 billion from its annual costs by 2017 through the shedding of units and elimination of thousands of jobs.

As of Dec 31, 2015, HSBC had 47,000 staff in the U.K. While the bank plans to cut thousands of jobs across the globe through branch closures and consolidation of IT and back-office operations, it also intends to redeploy resources to align with future growth opportunities and adjust to changes in the global operating environment.

“The relocation of these roles is part of HSBC’s large and ongoing IT investment to build a global world-class IT infrastructure,” said HSBC. “In addition, as publicly stated many times, we’ve targeted significant cost reductions.”

Dominic Hook, a national officer for Unite, said HSBC’s decision to slash so many IT jobs “is as ruthless as it is reckless”.

"As IT glitches across the banks continue to prove, it is ultimately the customers who will suffer the consequences,” he added. "Problems with HSBC's computer system cut customers off from access to online accounts on two occasions this year.

With stringent regulatory requirement and overall sluggish global economic growth, banks are facing increasing difficulty in boosting top-line growth. Hence, to maintain profitability, other big banks including Bank of America Corporation BAC, JPMorgan Chase & Co. JPM and Barclays PLC BCS have also taken defensive measures like trimming jobs as well as closing/divesting non-core and unprofitable businesses.

Currently, HSBC holds a Zacks Rank #4 (Sell).

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