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Why are Major banks cutting tens of thousands of jobs by 2012 - 2013 to save "costs"?

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posted on Aug, 1 2011 @ 04:03 PM
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Whaa...? Banks saving costs? What is going on?!


www.iol.co.za...



Here are some details about job cut announcements in major European banks:

* HSBC:

- The bank announced on August 1 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 a further 25,000 between now and 2013. The cuts equate to roughly 10 percent of HSBC's total workforce.

* CREDIT SUISSE:

- Announced on July 28 it is cutting about 2,000 jobs after weak trading activity and the strong Swiss franc hit second-quarter results. Switzerland's second-biggest bank said it planned to cut about 4 percent of its staff of 50,700.

- Chief Financial Officer David Mathers said the cost cuts, aimed at shaving 1 billion Swiss francs ($1.28 billion) from the expense run-rate during 2012, would hit all divisions but particularly the investment bank, and all geographies.

* UBS:

- Switzerland's UBS will slash jobs and review the future of its fixed-income business after the underperforming unit hit second-quarter profit and forced it to push back targets.

- The bank said on July 26 it would cut costs by between 1.5 billion and 2 billion Swiss francs in the next two to three years, and would likely book “significant restructuring charges” later this year.

- UBS will cut costs across all divisions, although it was too early to say how many jobs would go, Chief Financial Officer Tom Naratil said. Switzerland's biggest bank, which had to be rescued by the state in 2008 after massive losses on toxic assets, slashed the number of staff to around 64,000 from around 78,000 before the financial crisis, but this had grown again since 2010 to 65,700.

* RABOBANK:

- Dutch lender Rabobank said on July 13 it plans to cut more than 1,200 jobs in areas such as IT at its head office, seeking cost-savings of 219 million euros ($314.7 million) over the next two years. Rabobank plans to cut 376, or 6 percent, out of 6,400 permanent jobs at its headquarters, and about 850 contract positions will be cut in 2012 and 2013.

* LLOYDS BANKING GROUP PLC:

- Lloyds said on June 30 it will axe 15,000 jobs and halve its international presence, a plan its new boss, Chief Executive Antonio Horta-Osorio, hopes will save 1.5 billion pounds ($2.5 billion) a year by 2014 and return the part-nationalised British bank to health.

- The latest cuts for Lloyds, Europe's seventh-biggest bank by market value, will add to the 27,000 job losses since the 2008 financial crisis. It employs 103,000 staff.

* BANCO POPOLARE:

- Italian lender Banco Popolare aims nearly to double net profit by 2013 under a business plan that calls for streamlined operations. The bank said on June 30 it would cut 1,120 jobs and shift 1,100 workers to boost its retail network. Popolare has more than 20,000 employees.

* INTESA SANPAOLO:

- Intesa Sanpaolo aims to cut costs by about 770 million euros by 2013 through greater efficiency, including trimming 3,000 jobs, it said in a statement on April 6.


Also, its very strange that some banks like HSBC and Lloyds are trying to reduce their international presence:

*Banking giant HSBC has said it will cut another 25,000 jobs by 2013 and exit operations in 20 countries as it looks to save billions of dollars.www.bbc.co.uk...

*Lloyds said on June 30 it will axe 15,000 jobs and halve its international presence.www.iol.co.za...


As much as I like to relate this to an impending doom of Global Economic Meltdown which the banks have definitely foreseen, can anyone make any sense of this sudden urge by Big Banks to save "costs" and reduce "international presence"?
edit on 1-8-2011 by CasiusIgnoranze because: .




posted on Aug, 1 2011 @ 04:22 PM
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I think it was HSBC that stated they were looking at scaling down operations where there are decreasing profits and business activity while even beefing up their operations in higher growth areas. Good business decisions but may well be indicative of broader underlying economic problems throughout the global economy.



posted on Aug, 1 2011 @ 04:32 PM
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reply to post by surrealist
 


All those banks couldn't have picked a better date to fuel the 2012 hysteria!



posted on Aug, 1 2011 @ 04:33 PM
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one word , small but true , it fits so nicely, says how the thinks and feels towards you and me, it is GREED.



posted on Aug, 1 2011 @ 04:35 PM
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These banks are figuring the gravy train has run its course.
No more bailouts for them in the future.
They can see the trouble the Euro is having as well as the dollar and things are going from bad to worse.
Repositioning their business structure's will help them somewhat survive the coming crash.
Meanwhile the average person gets the shaft as usual.
This is something to watch for sure. Good find.



posted on Aug, 1 2011 @ 04:39 PM
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Originally posted by surrealist
I think it was HSBC that stated they were looking at scaling down operations where there are decreasing profits and business activity while even beefing up their operations in higher growth areas. Good business decisions but may well be indicative of broader underlying economic problems throughout the global economy.



HSBC, after just announcing a surprise 11.5 billion profit, announces a layoff of 30,0000 and this is called a good "business decision".
Not for the economy.
Not for these workers.
Not for the government in unemployment benefits.
Not for their families.
Not for the shops where they buy things.

Funny how a "good business decision" equals pure and simple greed.



posted on Aug, 1 2011 @ 04:41 PM
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reply to post by CasiusIgnoranze
 


Just because a bank says it is profitable doesn't mean it actually is.

en.wikipedia.org...

Mark to Market is essentially meaning fair representation of accounts, is what Banks USED to be held accountable for after Enron. Enron was at the time the greatest example of what happens when a corporation doesn't have to right down the value of depreciating assets, converting them to liabilities then making public the information to shareholders.

So ...

Banks were held subject to Mark to Market. After the financial collapse every quarter we heard things like "Bank of America had to write down billions of dollars today" "CitiBank after another write down" "Chase had to write off a large number of loans today" .....

Then suddenly it stopped.

Suddenly bank were raking in billions of dollars in profit. Why? Because they no longer had to report the depreciation of their assets!

Congress in all their corruptness decided a failed bank isn't as bad as people know a bank failed. Every major bank in the USA and Europe is essentially broke .. regardless of how many billions they make from manipulating equities the depreciation of home values destroyes almost all wealth they earn,

Except we are not allowed to know about it.

(This was probably the single biggest show of corruption by our defunct Congress in modern times.. legally allowing the cooking of books and lieing to share holders and the public.

www.bloomberg.com...
www.forbes.com...

A few articles about it in 2008-09)
edit on 8/1/2011 by Rockpuck because: (no reason given)



posted on Aug, 1 2011 @ 04:41 PM
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reply to post by KISSAEA123
 


The biggest surprise was HSBC cutting 30,000 jobs even though they saw a rise in profits! Business wise this is truly insane but I guess these banks have an agenda...
edit on 1-8-2011 by CasiusIgnoranze because: .



posted on Aug, 1 2011 @ 04:44 PM
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reply to post by Rockpuck
 


LoL, mainstream media made me actually think that HSBC made a huge profit until your explanation!



posted on Aug, 1 2011 @ 04:51 PM
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reply to post by CasiusIgnoranze
 


lol, they have everyone thinking they are profitable .. I'm sure most bank employees think they are profitable. IMO, if you do any business with the largest banks you should be incredibly careful. Those banks are broke, without the M2M rule change they would still be posting multi billion dollar losses. Every dollar a house depreciates the banks take a hit. I know my own house has lost another 10% in the past 6 months alone.
The banks will scramble to save cash .. some like Goldman Sachs will resort to mobster like activity (like holding the Worlds alluminum supplies hostage) in order to ballance their budgets.

Think of them as Zombies. The walking dead.



posted on Aug, 1 2011 @ 04:57 PM
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reply to post by CasiusIgnoranze
 


The thing with having employee's is a double edged sword.
They are a great asset while being a liability.
The banks are setting on large liabilities (mainly housing that has lost value) but they can't make those go away as easily as an employee.



posted on Aug, 1 2011 @ 05:02 PM
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I am not the only living soul who, after witnessing the federal government endorse moral hazard, and frankly even before this, made the definite and unbending decision to stop doing business with banks what-so-ever.

It has not been easy, and in fact, just last week I had a client pissing and moaning for at least twenty minutes about my refusal to do business with banks. I finally got so fed up with this client I suggested he find another freelance writer to handle his needs. I actually thought he would do this, but instead he just shut up and accepted that I would only take his cash, or if he wanted to pay the fee he could wire me the money via Western Union.

With Western Union, I do not even need any government issued identification, and can simply just establish a password and that, along with the Money Control Number, is all I need to collect the cash clients wire to me. It is just that simple.

I am not alone, and each day, more and more people are realizing that not only do they not need banks in order to survive, but that if banks hope to survive they need us!

Most people do not own enough wealth in order to justify doing business with a bank anyway. People living from pay check to pay check are nuts to be doing business with banks. Of course, I understand that people living from pay check to pay check cannot get their paycheck cashed without paying some sort of exorbitant rate without a bank account, but think about that...

...if your employer is paying you by check, this is supposed to be contract, under the law of contracts, and as long as your employer has enough money in the account to cover the amount written on the check, then the banks are contractually obligated to cash that damn thing, and yet...

...try arguing with a bank these days that they cannot coerce you into setting up a bank account just to cash your paycheck. They have so smugly lied, cheated, and misrepresented law that people everyday are getting way past fed up with it and doing the only reasonable thing one can do under these circumstances and that is refusing to do business with banks.

As more people pull their support from banks these banks will most assuredly have to cut costs.

If you are not getting a loan from a bank, and if you do not have enough wealth to justify keeping a savings or even checking account, then why the hell are you doing business with those banks?

Please don't tell me it is only so that you can conveniently cash your pay check. I mean that may be the case, but it is not at all your only option. In fact, why would you prefer a paycheck from your employer as opposed to cash, or better yet, precious metals? But, for the sake of argument, let's just wonder why accept a check from your employer for your labor. Would your employer accept a check from you? If not, why would you do for your employer what your employer won't even do for you?

Banks provide very little in the way of goods and services and yet rake in an awful lot of money for the very little they actually provide.



posted on Aug, 1 2011 @ 06:55 PM
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Hmm...scaling down operations, eh? Preparing for war?




posted on Aug, 1 2011 @ 09:44 PM
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Well this should come as no surprise. The fed just ended QE2 a few weeks ago. It will take a while for the money doled out to filter through the system and the banks are just responding accordingly. Momma Fed is taking the sugar back they’ve been feeding the banks to prop up the market. The sugar high will slowly fade and then the inevitable crash will follow.
The banks are showing some foresight this time around and starting to prepare. Manufacturing data released today shows a two year low in manufacturing. This is bad news for jobs and the global economy as a whole. I suspect the jobs data will be just as dismal this Friday as well.
Add to that the probable US credit down grade from AAA to AA and you have higher rates. This will translate into a higher cost of doing business and more lost jobs.
Just my 2 cents…..Well more like 1 ½ cents adjusted for inflation.



posted on Aug, 1 2011 @ 11:08 PM
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Every government lackey has done his job and these banks officially have debt slaves now. No need to work hard for making good loans. The governments of the world have enslaved their people and the banks now need to kick back and let the labors of the people go to them for nothing at all.

"Money for nothing and your chicks for free.."



posted on Aug, 2 2011 @ 01:19 AM
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You would think, if they had a profitable business model, that they would expand and hire rather than layoff and withdraw.



posted on Aug, 2 2011 @ 02:45 AM
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Well, they're not making money right now so how do we expect them to be able to pay those QE2 loans our government handed out. This seems like the best way if you are a greedy executive that is unwilling to take a pay decrease. Instead of them giving up one of there cars or not buying that new system that comes out or putting cheaper gas in their cars they would rather make quite a few of their employees literally olive up everything they have.




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