HSBC to move more jobs to India

Friday, 17 October 2003, 19:30 IST
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LONDON: HSBC, the world's second largest bank, has announced plans to cut 4,000 jobs in Britain and relocate them to India, Malaysia and China. The bank already has a large presence in India and the latest move is one of the biggest outsourcing moves by any British company to India. The announcement provoked furious reactions from unions. The decision by the bank, which employs 55,000 staff in Britain, follows similar moves by other companies, including BT, Goldman Sachs, Abbey National and Prudential. HSBC already runs a number of global processing hubs in Hyderabad and Bangalore in India and in Malaysia. HSBC said the jobs involved - mainly processing work and telephone inquiries - would move between 2004 and 2006. About 1,500 jobs are set to go in 2004, a further 2,000 in 2005 and a further 500 in 2006. Operations in Brentwood in Essex, Sheffield, Birmingham and Cardiff will be worst hit. Bill Dalton, chief executive of HSBC's U.K. operations, said the move was essential to the bank's continued success. "As one of the world's largest financial services companies, HSBC has a responsibility to all its stakeholders to remain efficient and competitive," he said. But Rob O'Neill, an official at Unifi, the banking workers' union, said: "The world's local bank has shown that if the job can be done cheaper somewhere else, then they'll move it. We will fight tooth and nail to get the bank to reconsider its actions." British financial services companies' offshore operations have grown from 200 employees in 1996 to 3,000 in 2002, according to Unifi. The union has previously indicated that by the year-end, 3,690 jobs will be offshore and that this number will rise to 5,140 by the end of 2004. But Financial Times said some forecasts predicted that as many as 3.3 million jobs in the U.S. and two million in Western financial services will be lost as a result of the trend to move jobs to lower cost countries such as India. In Britain, 200,000 job losses have been predicted by 2008. HSBC said the decision was regrettable but as a global bank it had to remain competitive on cost. Dalton said: "This includes increasing productivity and allocating resources to both developed and emerging markets. This is the best - indeed the only - way of ensuring job security for our staff worldwide." He said HSBC's staff numbers had remained stable during the past five years in spite of a large number of job losses in the financial services industry. The bank said it hoped many of the job losses would be through voluntary redundancy, natural turnover or early retirement. The latest losses come on top of the 1,400 cuts that HSBC announced in June, for which it blamed a weak economy and rising costs. The bank said less than 70 of those had been through compulsory redundancy.
Source: IANS