HSBC to cut 3,500 UK staff

HSBC, the world's second- largest bank, is to cut 3,500 jobs in the UK and will recruit 1,000 staff to deal with customers in its branch network.

The bank said it was stripping out management posts and jobs from its head office in London and other processing centres in an effort to reduce costs. Some 550 jobs will be outsourced to India.

The latest job losses come on top of HSBC's decision to cut 4,000 jobs last year and shift the work to India and Asia. The shake-up has been instigated by Mr Michael Geoghegan, the new head of HSBC's UK banking operations who has been reviewing the UK operations since January.

He has concluded HSBC's UK cost base is too high. The UK contributes 25 per cent of HSBC's annual pre-tax profits of $12.8 billion but accounts for 33 per cent of its costs.

HSBC also blamed rising costs for its decision, including the increased regulation, which cost it $400 million last year world-wide.

Costs in the UK have been rising almost as fast as income. Between 2001 and 2003 HSBC's UK income grew by 9.8 per cent while costs rose by 8.4 per cent.

Mr Rob O'Neill, national secretary for Unifi, the bank union said: "These latest plans to cut jobs are coming from the top down in order to slash costs and is certainly not a measured look at the business needs."