With HSBC and several other banks announcing lay-offs, bank staff are speculating about where the axe will fall next. It turns out many of those in banking circles are crunching the numbers to see who will have a job next year.
Banker friends have told White Collar that '2, 4, 6' as well as '1 or 3' are the most popular combinations being talked about in order to identify the highest risk groups.
The '2, 4, 6' refers to those who have been working for 20 years with the bank, are aged 40 something and earn HK$60,000 a month. These are believed to the highest risk group because of their relatively high salary.
The '1 or 3' refers to the difficult decision being faced by department heads. When they have to cut headcounts, they will either need to give up an expatriate staff member - which including benefits may cost as much as three junior local staff - or keep the expatriate and get rid of three local juniors. The numbers game comes after HSBC this month said it would cut 3,000 people - 10 per cent of its staff in Hong Kong over three years. Globally, the bank has said it would cut a total of 30,000 staff, out of 296,000, by 2013 to cut costs and boost profit.
HSBC chief executive Stuart Gulliver said in May he would close loss-making businesses and branches as well as reduce headcounts in order to cut global expenses by US$2.5 billion to US$3.5 billion annually by 2013.
HSBC is not alone in wielding the axe. Credit Suisse was reported in July to be planning to cut 1,500 to 2,000 jobs and in June Lloyds Banking Group said it planned to pare 15,000 positions. The whole banking sector is under pressure to cut costs as a result of new international banking regulations on bank capital adequacy and liquidity known as Basel III. The rules to be implemented will add costs and restrict banks from getting into high-risk, high-return businesses.