HSBC to Shed 50,000 Jobs in Overhaul of Global Business

LONDON — Like other global institutions, HSBC, Europe’s largest bank, has been under severe pressure since the 2008 financial crisis to cut costs, meet stringent new regulatory demands and satisfy restless shareholders.

To that end, the British bank said on Tuesday that it would shed as many as 50,000 of its approximately 250,000 jobs as it sells several underperforming businesses, reduces the size of its global investment banking business and tries to cut billions of dollars in costs.

The latest moves are part of HSBC’s major strategic revamping announced by Stuart T. Gulliver, the bank’s chief executive, who took the helm in 2011.

As part of the newest changes, HSBC said it would increase its investment in Asia, where it generates more than half of its earnings. The bank has been evaluating whether to move its headquarters to Hong Kong from London, and it said it would complete that review by the end of the year.

The bank, which traces its roots to Hong Kong and was called the Hongkong and Shanghai Banking Corporation when it was founded, still has close ties to the Asia-Pacific region. Asia accounted for 78 percent of the bank’s pretax profit in 2014.

Mr. Gulliver is under increasing pressure to satisfy investors after recent scandals damaged the lender’s reputation. HSBC also faces an increasingly challenging regulatory environment in Britain and across the globe. The bank’s shares have fallen about 2.4 percent in the last year.

“We recognize that we need to do a lot more to address the changing environment,” Mr. Gulliver said.

The bank, which has operations in 73 countries and territories, has already exited dozens of underperforming businesses in recent years as it looks to cut costs and reduce risk.

Among the moves announced on Tuesday, the bank said it would eliminate 22,000 to 25,000 full-time jobs, or about 10 percent of its work force, by the end of 2017. About 8,000 of the job cuts are expected in Britain, where HSBC employs about 46,000 people.

It also plans to reduce its head count by an additional 25,000 positions through the sale of its underperforming businesses in Turkey and Brazil.

Investors did not seem impressed, and the bank’s shares were down nearly 1 percent in trading in London on Tuesday.

“This was not the massive shake-up some investors had been hoping for,” Chirantan Barua, an analyst at Sanford C. Bernstein, said in a research note. HSBC, he said, “has failed to bring out anything radically different from moves which have been widely expected for some months now.”

The bank said it would seek to cut costs up to $5 billion annually within two years. However, it also expects to book revamping costs of $4 billion to $4.5 billion over that period.

Raul Sinha and Vivek Gautam, analysts at JPMorgan Chase, said in a research note that they supported the actions to shed businesses with low returns, but “the changes announced are unlikely to positively impact earnings estimates.”

The plans announced on Tuesday are the second major job reductions at HSBC since Mr. Gulliver took over. A number of the bank’s rivals — including Barclays, Credit Suisse and Royal Bank of Scotland — have announced similar plans to reduce the size of their work forces and exit certain businesses like commodities trading.

Just this week, Deutsche Bank said its co-chief executives, Anshu Jain and Jürgen Fitschen, would resign, as that bank also faced pressure from investors and rising legal and regulatory costs.

HSBC shed about 37,000 jobs from 2011 to 2014, but those cuts did not benefit the firm as much as it had hoped because its regulatory and compliance costs skyrocketed in recent years.

The bank spent more than $11 billion on regulatory and compliance charges in the last four years as it faced a number of investigations and agreed to a series of settlements related to accusations of money laundering and the rigging of foreign exchange markets.

The bank has also faced recent inquiries into its small Swiss private bank operation, as prosecutors examine whether it helped wealthy clients evade taxes. In addition, its returns in Asia were not as robust as expected.

Like many of its rivals, HSBC is looking to reduce the amount of riskier assets on its balance sheet, including cutting the size of its global banking and markets business and focusing on strategically important and profitable businesses.

HSBC also said it would reduce so-called risk-weighted assets, a measure of the risk of the capital it holds, by 25 percent, or about $290 billion. About half of those reductions will come from the investment banking business, the company said.

In April, HSBC announced that it was formally reviewing whether to move its headquarters from Britain. The bank is facing a shifting regulatory landscape in Britain, including a bank tax that has hit British lenders particularly hard.

The government has raised the bank tax, known as a bank levy, nine times since it was introduced in 2011, taking in a total of 5.3 billion pounds, or about $8.1 billion, according to the British Bankers’ Association.

HSBC’s payment has more than doubled since 2012. The tax cost the bank about $1.1 billion in 2014, when HSBC reported a profit of $13.7 billion. It paid $472 million in 2012.

Despite reducing the size of its business in some markets, HSBC said it planned to expand its asset management and insurance operations in Asia in hopes of capturing “expected opportunities from emerging wealth in the region.”

It also plans to increase its business in the Pearl River Delta area in the southern Chinese province of Guangdong, and in parts of Southeast Asia.

“The world is increasingly connected, with Asia expected to show high growth and become the center of global trade over the next decade,” Mr. Gulliver said in a news release. “I am confident that our actions will allow us to capture expected future growth opportunities and deliver further value to shareholders.”