HSBC places bankers on ‘gig financial system’ contracts amid scramble to chop prices

HSBC has put some employees on short-term “gig financial system” contracts as a part of an aggressive cost-cutting drive overseen by its new chief govt.

The financial institution, which has 211,000 staff worldwide, has positioned a few of its bankers on three-month to six-month contracts forward of their divisions being closed. As a result of many nonetheless have work to do for his or her purchasers, they’ve been stored on to finish initiatives however just for the quick time period.

The association resembles “gig financial system” contracts the place employees are employed solely to finish discreet duties, employment attorneys stated.

“It sounds just like the gig financial system for banking,” stated Emilie Cole, founding accomplice at Cole Khan. “It doesn’t simply should be Uber or Deliveroo now – it may very well be banking.”

It’s unclear what number of bankers have been placed on the brand new contracts. The shake-up, which was first reported by Bloomberg, additionally includes many vice-chairman roles throughout the funding banks being axed.

The modifications come as Georges Elhedery, HSBC’s new chief govt, tries to slash $1.5bn (£1.2bn) from the financial institution’s prices by the tip of subsequent 12 months. The 160-year-old financial institution is aiming to decrease its wage invoice by 8pc, which is more likely to imply the lack of hundreds of jobs throughout the UK and different markets.

Mr Elhedery has reorganised the financial institution’s sprawling empire since he took over in September. He cut up the financial institution into 4 distinct models, in comparison with its previous mannequin of working below three enterprise traces and 5 geographical areas.

Controversially, he additionally cut up the financial institution geographically into “east” and “west”, specializing in its two most important markets of Hong Kong and the UK. The change sparked hypothesis that HSBC may very well be making ready for a break-up as political strain on the enterprise mounts. The financial institution has denied there are any plans for a cut up.

Mr Elhedery has additionally merged the funding financial institution and industrial financial institution right into a single division, a transfer he stated would take away duplication, and can also be closing quite a few divisions as a part of the cuts, together with exiting dealmaking and inventory market companies within the UK, Europe and the US. The financial institution will as a substitute focus these efforts on the Center East and Asia.

Lots of the short-term contracts are for bankers throughout the divisions being shutdown, that means they are going to shortly be leaving the enterprise.

HSBC was contacted for remark. A spokesman instructed Bloomberg: “We stay dedicated to supporting purchasers globally. HSBC is shifting to a brand new, easier construction as we proceed to concentrate on merchandise and geographies the place we will have a transparent aggressive benefit.”

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