Business Bites

HSBC to cut 35,000 jobs, new chancellor sticks to schedule, Bezos creates $10bn ‘Earth fund’

HSBC has announced plans to cut 35,000 jobs over the next three years after a dire set of financial results. Profits have fallen by 33% year on year and that is before the impact of the coronavirus can even be fully measured in Q1 and the months to come.

The virus has principally affected businesses and people in Asia, which is where the lion’s share of HSBC’s profit is generated. Profit before tax fell to £10.2bn. As a result, the plans are aimed at reducing total costs by about $4.5bn by 2022.

The cuts amount to approximately 15% of the company’s global headcount, and massively exceeds the 10% that industry insiders were anticipating. The bank’s interim CEO Noel Quinn told Reuters: “The totality of this programme is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years.”

He didn’t confirm where geographically the axe is most likely to fall, but its London presence (on the investment banking side) is one of its most substantial, with 40,000 people employed in the UK.

New chancellor Sunak will go ahead with presenting a budget on 11 March, despite having only been in the post for days after the prime minister’s cabinet reshuffle which saw Sajid Javid resign. Sunak, 39, has just a few weeks to cobble together comprehensive plans for spending and taxation.

It helps that he was Javid’s deputy, and so it’s not as though he has been shipped in from a place of zero experience with the Treasury and its workings, or even an understanding of what is possible.

It is thought – and probably expected really – that Javid’s budget plans were significantly progressed, and some of the headline policy points such as spending on infrastructure are pretty obvious from Boris Johnsons agenda and manifesto. So there will be a base from which Sunak can work. However, pundits reckon he will tear up some of the Javid-era rules in order to free up more cash for the Johnson investment splurge.

The PM has a lot of work to do in the next five years if he wants to repay the trust placed in him by voters in former Labour strongholds. The policies may include increasing taxes on the wealthy – even going as far as a form of ‘mansion tax’ to try to finance some of the spending splurge.

Amazon founder Jeff Bezos has pledged $10bn of his own money for environmental work, and while this is a tiny proportion of his near $130bn fortune, it is still one of the largest acts of giving in history. The online retail tycoon announced his plans on Instagram, but it comes with not a little cognitive dissonance, given that a recent investigation by the Guardian found his company was threatening to fire employees if they were vocal about Bezos’ and the company’s environmental record.

In his post, Bezos said: “I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share. This global initiative will fund scientists, activists, NGOs – any effort that offers a real possibility to help preserve and protect the natural world. We can save Earth. It’s going to take a collective effort from big companies, small companies, nation states, global organizations, and individuals.”

Despite the apparent conflict between his personal philanthropic plans and his company’s policy, Bezos does have some form on pro-environmental views. He has sparred with US president Donald Trump a bunch of times, especially in the wake of Trump’s decision to pull the US out of the Paris climate accord.

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