HSBC to cut more than 6,000 U.S. jobs
HSBC will shutter hundreds off U.S. branches as it reduces its mortgage lending services.
NEW YORK (CNNMoney.com) -- European bank HSBC is shuttering hundreds of branches in the U.S. that specialize in mortgage and consumer lending, and axing thousands of jobs, as it pulls back from its foray into the American housing market.
HSBC (HBC) said on Monday that it will cut 6,100 jobs in the U.S. and close its HFC and Beneficial bank branches.
HSBC spokeswoman Kate Durham said the approximately 800 branches of HFC and Beneficial banks specialized in consumer and mortgage lending and are spread throughout the U.S.
As of Monday, these branches are no longer offering loans, she said, and employees are starting to receive their 30-day notices.
Durham said this will not affect existing loans from these branches, and new loans will still be provided at HSBC branches.
HSBC announced the job cuts and branch closings as it unveiled a full-year net profit of $5.7 billion, down 70% from $19 billion in 2007. The bank also said would sell more than 5 billion shares of common stock at $3.61 a piece and would consider acquisitions in the Asian market.
The stock plunged 20% in midday trading.
Alex Potter, analyst for Collins Stewart, said the job cuts are "regrettable, to say the least," but said it's a wise move for the company in the long term.
Potter said the Beneficial and HFC style of lending "was bred of an easy credit environment. I'm afraid that that environment is no longer applicable and unlikely to return for some time."
"It was very much aimed at the lower end of the socio-economic spectrum, and that is being enormously impacted by unemployment in the U.S. and falling home prices," he said.
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