Europe's HSBC is reportedly mulling whether or not to cut jobs by the thousands following the unexpected departure of its Chief Executive Officer (CEO) John Flint. He served as the CEO for 18 months before he revealed on Monday that he will step down.
In an interview with The Wall Street Journal, HSBC Group Chief Financial Officer (CFO) Ewen Stevenson said most of the job cuts will impact senior roles. Around 4 percent of the bank's overall wage costs are expected to be slashed.
The news came hours after Flint's farewell was announced. While HSBC Chairman Mark Tucker said that the decision was made due to the "increasingly complex and challenging global environment in which the Bank operates," some reports suggested that there was tension in the board.
Differences between Tucker and Flint regarding some processes in the company reportedly played a role in the decision to let go of Flint. However, Tucker has since stressed that there was no issue between him and Flint.
Stevenson, on the other hand, hinted during a conference call with investors that there were issues with the U.S. business. No successor has been decided as of writing but Noel Quinn has been appointed as the interim CEO for now.
Quinn is HSBC's unit head of the Global Commercial Banking unit. It is unclear when a new CEO will be appointed and chosen by the board but Tucker predicted that it may take up to 12 months since the bank is considering external and internal candidates for the position.
Earlier on Monday, multiple outlets reported that Flint's resignation was "mutual." CNN noted that while HSBC saw higher profits in the second quarter of this year under Flint's command, the bank admitted that there are challenges along the way.
Flint said in a statement that he agreed with the HSBC Board that "this is the right time for change" not just for the bank but also for him. The 51-year-old former CEO will still be available to offer support during the transition period.
Flint has been working with HSBC for 30 years. His CEO run kicked off on February 2018. Tucker said in a statement that the bank's 16 percent increase in pretax profits "reflect" Flint's contributions to the group, The Guardian reported.
As for Flint, he said he was "proud" of what he, along with HSBC, achieved over the past years. It is unclear if he will be chosen to serve in other positions amid the administrative reshuffle.
