HSBC's cost-saving plan hit a rough patch in Shanghai yesterday as dozens of laid-off sales staff at its life insurance joint venture protested at the bank's headquarters.
HSBC Life Insurance, a 50-50 joint venture with National Trust, fired its sales team of about 130 staff in what the largest bank in Europe said was a plan to focus on bancassurance.
"HSBC has reviewed its life business in China to focus on our own bancassurance, serving our own bank customers and those of our partners in China," HSBC said in a statement. "This means we will no longer use contracted direct sales."
It said no HSBC employees would lose their jobs because the sales staff would be offered "redeployment".
It said a number of individuals had been offered alternative arrangements with Allianz.
HSBC also distributes life insurance products for Allianz on the mainland.
However, the employees thought otherwise, as they gathered at the bank's headquarters in Lujiazui to demand compensation.
They said they were surprised by the decision to dismiss the sales team.
"We need an explanation from the company," said salesman Chen Baofeng. "We are not satisfied with the company's arrangements."
Police later intervened and the two sides agreed to hold talks later.
The life insurer was established in 2009 with a registered capital of 500 million yuan (HK$624 million). (
Its loss widened 20 per cent from a year earlier to 146.3 million yuan in 2011, according to the latest annual report on its website.
Chief executive Stuart Gulliver said the group would seek a further US$1 billion in annual savings this year.
It was reported that thousands more job cuts would be announced when it updated the cost-cutting process during an interim management statement on May 7.
The Financial Times reported that 5,000 jobs would be lost.
HSBC has divested 49 businesses since Gulliver took the reins in 2011 amid his strategy to focus on markets where the company is most profitable.
The bank plans to close or sell an additional eight to 10 businesses this year and next.
HSBC recently sold its entire stake in Ping An Insurance to Thailand's Charoen Pokphand Group for HK$72.7 billion.