HSBC's cost-cutting plans are facing a significant hurdle due to a shortage of desks in its new office space.
The bank is considering a return-to-office policy, requiring employees to work from the office for at least three days a week, amidst a relocation of its London headquarters from Canary Wharf to the City, which will result in a substantial reduction in office space, as reported by .
However, this move may throw a wrench into CEO Georges Elhedery's plans to slash costs. Elhedery may need to purchase additional desk space for staff in London, Bangalore, Hyderabad, and Guangzhou, which could exceed $200m annually, according to sources cited by Bloomberg.
This would severely impact Elhedery's goal of saving $1.5bn in annual costs by the end of 2026.
HSBC exploring cost-cutting strategies
Since taking the helm, Elhedery has been implementing strategies to reduce expenses, including scaling back operations into "eastern markets" covering Asia-Pacific and the Middle East, and "western" markets encompassing the Americas and Europe. The bank is also exploring the use of AI bots to streamline back-office operations and reduce costs, as reported by Financial News.
In the º£½ÇÊÓƵ, HSBC employs approximately 34,700 people across various sectors, including retail, private, commercial, and investment banking. HSBC, with over 211,000 full-time employees on its payroll at the end of last year, stands out among its peers who have already encouraged staff to return to the office.
Lloyds summoned employees back to the office for two days a week in September 2023, and Barclays set a minimum attendance requirement of three days a week earlier this year.
However, this approach seems mild compared to the bank's Wall Street counterparts, which have taken a more stringent stance.
Both JP Morgan and Goldman Sachs have enforced a five-day office working policy.
HSBC chose not to comment.
