http://www.reuters.com/article/2011/08/01/us-hsbc-idUSTRE7701HH20110801

(Reuters) - HSBC will shed 30,000 jobs as it retreats from countries where it is struggling to compete, Europe's biggest bank said on Monday after it reported a surprise rise in first-half profit.

Shares in HSBC rose over 4 percent after it unveiled first-half pretax profits of $11.5 billion, up from $11.1 billion a year ago and better than the $10.8 billion average in a Reuters poll of analysts.

The bank also said it had cut 5,000 jobs following restructuring of operations in Latin America, the United States, Britain, France and the Middle East and that it would cut another 25,000 between now and 2013.

"There will be further job cuts," Chief Executive Stuart Gulliver told reporters on a conference call. "There will be something like 25,000 roles eliminated between now and the end of 2013."

The cuts equate to roughly 10 percent of HSBC's total workforce. They come on top of planned reductions in overall headcount in a program of disposals that also forms part of a plan to focus on HSBC's Asian operations.

Just pondering how increased profits are supposed to automatically translate into more employment.

This kind of news i never understood. I know next to nothing of finances and such but what i see is: A company`s profits go down, they fire people; B company`s profits go up, they still fire people. Shouldn`t the raise in profits allow them to keep jobs or invest where they are losing money?

Well you have to consider the logic behind the cuts.

For example, in France (one of the cited countries), HSBC entered the territory by buying a big bank, CCF, then by buying many of the smaller banks that were familly owned.... this results in an abundance of bank street offices and some overcrossing jobs elsewhere in the company. The logical issue of the situation is to close some street offices and reduce the workforce by letting go of the employees that are not needed.

A company is not a charity fund, if they don't need the people, they do economic reductions of the workforce.

(moreover, in the case of France, they are displacing their head offices in the next few years and will also be making cuts based on that)

You're not considering what HSBC might be predicting in their future ... The global finance system is a gigantic mess, and it is likely that in the not too distant future these banks will be struggling for their survival.

I would argue that increased employment is governed far more by the perception the business has about future business conditions than a lot of things, including tax rates and even regulatory climate.  If a nation races to the bottom and totally trashes its economic base, it sets into place a downward spiral that can lead to its eventual demise.

saw this on drudgereport
really sickening that a company would treat employees this way
MORE UNIONS!!

You're correct that current business conditions and the expectations surrounding future business conditions determine hiring and investing decisions within a company, but you forget to consider that tax-rates and regulatory climate heavily influence current business conditions and a business' expectations for future business conditions ...

If you're a business in the United States and you constantly hear the rhetoric of increasing business taxes, increasing regulation and introducing cap-n-trade and you are already uncertain about how your company will handle Obamacare and other regulations and emerging business conditions the last thing you're going to do is hire employees unless you're in desperate need for them.

When a business utilizes employees that are salaried, at what point and time will they ever hire new people unless they see themselves in depserate need for them?  See this current situation regarding the bank.  They are making money.  Profits aren't an issue.  They feel there isn't a need for as many employees, despite making a profit, so they let them go, rather than figure out better ways to redeploy them.  Do you think if a business could make a profit without hiring additional employees, they don't do that?

Companies will rarely downsize when they're turning a profit unless they believe the only way to increase profit is to reduce expenses ... because, even if they believe that an individual is not providing a benefit to the company, companies tend to favour growth in revenues to increase profits which (almost always) requires growth in the number of employees.

With a bank, it is entirely likely that they're reducing overhead to build up capital reserves to survive a market shock they're anticipating.

That was the old times they did that.  As it is now, IBM regular downsizes (or they like to say "right size") by regularly cutting head count, and hiring other people.  Also you say G.E, under Jack Welsh, made a point to always fire at least 10% of the work force every year.  To make even more profits, they would cut employee headcount, and do consolidation.  No matter if the time was good or bad, they were always "triming the fat".  I remember the mantra back in the day also with Tom Peters speaking of how a department went from 40 people to 3 in a large company and didn't lose anything.

If a company believes it will get increased revenues through reengineering, it does that, and lets people go.  This is the new norm.  I understand what you are saying as historically accurate, but the trendy thing now is to downsize in good times or bad, just as was seen with the bank.