There's apparently trouble on the Eastern front for global banking conglomerate HSBC(NYSE: HSBC), and investors are clearly concerned. On news of layoffs in two major Asian markets, they traded out of the company's stock, to the point where the bank's U.S.-listed shares lost more than 2% of their value.
Pink slips coming?
HSBC is in the process of laying off a clutch of workers in its investment-banking operations in two of the continent's financial hubs, Hong Kong and Singapore, according to reporting from Reuters. Citing three unidentified "people with knowledge of the matter," the news agency said the affected workers are mainly associates and vice presidents at the sprawling international bank.
If the report is accurate, HSBC wouldn't be the first to reduce its investment banking workforce in Asia, nor is it likely to be the last. The mainland China and Hong Kong stock markets have both been struggling, largely due to structural issues in the Chinese economy. When markets are in the doldrums, investment banks tend to cut headcounts.
HSBC didn't directly address the reporting in the Reuters story. An unnamed spokesperson from the bank told the news agency that, "The size of our workforce will fluctuate in any given year."
Not a secure job these days
While the news isn't all that encouraging, it doesn't come as a great surprise -- likely a reason why HSBC shares weren't punished harder on Tuesday. China and the markets around it have been struggling for some time, and it was inevitable that investment banks would take a hit from this. We can expect more employee-roll reductions if the gloom about Asian markets persists.
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HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.
