HSBC to layoff 500 in Asia

HSBC said Tuesday that it was laying off 500 people in Asia, 90 percent of them in Hong Kong, in a further indication that the Asian financial community, so far relatively unscathed by mass layoffs seen on Wall Street, is being affected by the global financial crisis.

The financial sector in Asia-Pacific had been buffered by the relative strength of Asian economies - many of which are still growing, albeit more slowly than before - and by the lower exposure that many Asian banks had to the U.S. mortgage-related problems that triggered the global credit crisis last year.

But HSBC was among the banks first hit by losses in U.S. sub-prime mortgages and Hong Kong, the bank's base in Asia, officially entered a recession, according to data released last week. Economic conditions were cited as a reason for the layoffs.

"Such decisions are always exceptionally difficult to make and are a result of organizational changes in a number of areas as well as the deteriorating economic conditions and our cautious outlook for 2009," an HSBC executive director, Peter Wong, said about the recent cuts in a letter to employees obtained by Bloomberg News.

The job cuts Tuesday add to the 1,100 layoffs in its investment banking operation that were announced in September. The earlier layoffs amounted to 4 percent of the unit's total, including about 100 jobs in Hong Kong.

"The financial crisis is well and truly here now," said Andrew Oliver, managing director at Profile Search & Selection, an executive search firm in Hong Kong.

Citigroup on Monday announced it would increase it job cuts worldwide to 52,000, in one of the deepest such cuts so far to be announced. No geographical breakdowns of the Citigroup cuts were immediately available.

Source : IHT
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic]