Remarkably, HSBC has changed course in recent days, terminating dozens of investment bankers on the day that they were supposed to receive their bonuses. Astonished staff members were confronted with a startling new reality after expecting at least partial compensation for their year’s work.
By taking such a bold approach, HSBC is unmistakably indicating a significant reassessment of its goals in investment banking. The sudden but well-thought-out decision is part of a larger trend that is reshaping expectations overnight in major international banks.
| Information | Details |
|---|---|
| Layoff Timing | Same day as bonus announcements |
| Strategic Focus | Prioritizing Asia and Middle East operations |
| CEO Leading Restructuring | Georges Elhedery (since September 2024) |
| Cost-Cutting Target | Save $1.5 billion annually by 2026 |
| Bonus Impact | No payouts for redundant VPs and above |
| Source | HSBC Fired Bankers on Bonus Day |
A Change in Culture: “Very Unlike HSBC”
Long regarded as a bank that placed a high value on its employees, HSBC’s move felt remarkably similar to a corporate culture more frequently linked to layoffs in Silicon Valley than in London’s financial district. With a bold move away from traditional loyalty-driven models, HSBC is adjusting to the realities of the modern economy.
While some organizations notably offer pro-rata bonuses to departing employees, others have stopped doing so due to intense profit pressures, according to legal experts. With its most recent action, HSBC appears to be firmly leaning toward the latter option.
Strategic Realignment: Making a Large Eastern Bet
HSBC is obviously moving eastward under Georges Elhedery’s direction. By systematically merging divisions and withdrawing from the Western M&A and equity capital markets, the bank is honing its global presence to areas where customer connections and market expansion are still very promising.
In order to concentrate on its core strength—its longstanding dominance in Asia and the Middle East—where business opportunities continue to grow despite global economic headwinds, HSBC is reorganizing strategically with the goal of drastically cutting overheads.
Executive Salary: A Startling Difference at the Top
Those at the top saw a significant improvement in their incentives, while mid-level bankers were leaving without bonuses. HSBC’s bonus pool grew to $3.8 billion in 2024, which was a surprisingly high amount considering its larger cost-cutting initiative. In 2025, Elhedery himself might make up to $19.2 million if important performance goals are reached.
Even though the immediate human costs are extremely personal for those displaced, HSBC is demonstrating confidence that its strategic decisions will eventually pay off for investors by placing such a strong correlation between executive compensation and share performance.
HSBC Is Not the Only Bank Trending
HSBC is joining a group of big banks, like Barclays, that are strictly limiting bonus distributions through strategic cost-cutting and streamlined operations. Banks’ tolerance for inefficiency has drastically decreased as a result of rising interest rates, slower deal flows, and stricter capital requirements.
Remaining viable while managing rising costs is frequently a challenge for medium-sized investment operations, which many, like HSBC, are actively addressing.
Automation and Outsourcing: The Next Big Thing?
In addition to layoffs, it has been reported that HSBC is considering contracting with industry titans like Citadel Securities and Jane Street Group to outsource some of its fixed income trading operations. HSBC intends to further streamline its operations by working with specialized third parties, guaranteeing future cost savings and increased flexibility.
These conversations, while still in their infancy, point to a remarkably successful tactic: outsourcing non-core functions selectively to improve overall agility and resilience in a volatile market.
