HSBC cut 35,000 jobs to pay for a decade of Western banking it should have left earlier

HSBC had been the world's local bank — everywhere, for everyone — and for a decade its Western retail and commercial operations had earned less than the capital they consumed. On 18 February 2020, chief executive Noel Quinn announced the correction: 35,000 jobs to go from a workforce of 235,000, $4.5 billion of annual costs to be cut, and $100 billion of assets to be shed, with the US retail network — 224 branches — to be cut by roughly a third or sold.

The pandemic paused the plan in April — cutting jobs during a national emergency was optics no bank wanted — and resumed it with interest. By August, HSBC's first-half pre-tax profit had fallen 65% to $4.3 billion, bad-loan provisions were heading toward $13 billion, and Quinn said the cuts would 'accelerate'. The UK investment bank and the American branch network took the reductions; the pivot was toward Asia, where the bank already made more than half its profits — most of it in Hong Kong.

The restructuring worked financially and read as a retreat culturally: the bank that had advertised its everywhere-ness for twenty years was conceding that its future was regional. The 35,000 were not the cost of the pandemic; the pandemic was the excuse to pay, faster, for a strategic admission the bank had owed its shareholders for years. The West had stopped paying for the world's local bank, so the world's local bank stopped being in the West.