HSBC Holdings, Europe's largest bank by market value, will cut up to 25,000 jobs globally to reduce costs and shift its center of gravity further toward the fast-growing Asian economies where it started operations 150 years ago.
The bank, which is based in London and has a value of around $184 billion, said Tuesday it is "undertaking a significant reshaping of its business portfolio" and "redeploying resources to capture expected future growth opportunities."
Though it has not yet decided whether to move its headquarters, the bank's statement shows clearly where it thinks its commercial future lies -- China and the Asia-Pacific region.
HSBC already has a major presence across Asia. About 75% of its 2014 profits were generated in the region, even though it has only about a third of its staff there and its assets are dwarfed by those it controls in Europe.
HSBC has historic ties to the region. It was founded in Hong Kong in 1865, when the city was a British colony, in order to finance growing trade between China and Europe, much of it involving opium. Its original name, later shortened to HSBC, says it all: The Hongkong and Shanghai Banking Corp.
"The world is increasingly connected, with Asia expected to show high growth and become the center of global trade over the next decade," Stuart Gulliver, HSBC's chief executive, said in a statement. "We recognize that the world has changed and we need to change with it."
HSBC, which has operations in over 70 countries and around 51 million customers, said it intends to sell its operations in Turkey and Brazil, a move that will see its workforce reduce by around another 25,000. Although planning to dispose of its operation in Brazil, HSBC said it plans to maintain a presence in that country to serve large corporate clients in their international dealings.
Overall, HSBC aims to cut costs by $4.5 billion to $5 billion by the end of 2017 and reduce the number of full-time employees by around 10%, equivalent to between 22,000 and 25,000.
About 8,000 of those lost jobs will be in Britain. The bank hopes many will come from attrition, by not filling posts that are vacated.
A top union official in Britain said the expected job cuts represented the latest example of a workforce being punished for the misconduct of others, notably those in senior management and investment banking. HSBC has paid billions in fines globally to settle investigations of market-rigging and allegations it helped clients evade taxes and launder money.
"After all the scandals of recent years, front-line staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation," said Dominic Hook of Unite union.
A further concern for British staff is the possibility that the bank will move its headquarters out of London. The bank said it will make a decision on that possibility later this year.
The bank has already warned about the economic risks facing Britain if the country opts to leave the European Union in a referendum that the government has said will take place by the end of 2017. It's also complained about the cost of a levy that the British government puts on banks -- HSBC is set to pay around $1.5 billion this year alone on that.
HSBC's announcement comes a day ahead of a major speech from British economy minister, George Osborne, who many think is considering pulling back the bank levy.
"We think the financial logic for HSBC to escape the clutches of the U.K. -- and Europe -- is overwhelming," said Ian Gordon, an analyst at Investec. "What possible reason is there to stay?"
HSBC's plans to accelerate its investments in Asia will involve the expansion of the asset management and insurance businesses in a bid to earn more profits from the region's rapidly expanding class of newly wealthy.
In particular, the bank is planning to develop business in southern China's Pearl River Delta manufacturing heartland in Guangdong province, which is next door to Hong Kong and one of the wealthiest regions in the world's No. 2 economy. It's also planning a similar expansion in Southeast Asia, where booming economic growth in countries such as Indonesia is swelling the ranks of the middle classes.
HSBC added that it wanted to return to profitability in the global banking and markets division, a branch that has been hit by tougher regulations since the financial crisis. In 2014, HSBC saw its post-tax profit fall to $14.7 billion, from $17.8 billion the year before, largely because of a series of fines, settlements and customer compensations in Britain.