By Shelley DuBois, writer-reporter
FORTUNE -- If you're one of HSBC's shareholders, you're probably stoked. For the first time in a couple of earnings periods, the bank exceeded expectations, netting a $11.5 billion pretax profit for the first half of 2011, up from $11.1 billion a year ago. CEO Stuart Gulliver also looks like he's making good on his plan to cut costs and focus on growth markets, announced this past May.
But if you're one of HSBC's approximately 300,000 employees, it might be hard to join the celebration. Much of the cost savings in the company's strategy will come from shedding a total of 30,000 jobs before 2013 (HSBC has laid off 5,000 employees over the past six months), not counting jobs lost from selling or disposing of portions of the company.
While HSBC may be on track to slim down, it now has to handle the tricky situation of maintaining a productive workforce when plenty of its people are facing the chopping block. The market seems to like it when big banks slim down these days, and several are doing just that. Today, Barclays (BCS) announced that it plans to cut 3,000 jobs this year, and that the company's pretax profit dropped about 33% from the previous year.HSBC, on the other hand, announced its job slashing plans along with an increase in profits. Its share price rose 5% after yesterday's announcement.
The job loss was expected, says Canaccord Genuity analyst Cormac Leech, a sentiment that HSBC CEO Gulliver echoed during an earnings conference call yesterday morning. "If we're looking to take 10% out of the cost-base of the firm, it's not altogether surprising that's about 10% of the headcount of the firm." More
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