The mood at offices of Standard Chartered is not quite upbeat with Asia-focused British lender announcing plans to slash 15,000 jobs from its 86,000 global workforce by 2018. This move is aimed at raising $7-billion in new capital.
The bank’s Asia office, StanChart Singapore currently employs about 7,000 people with Judy Hsu as its new CEO who joined the lender this September. Hsu declined to comment on the number of jobs that will be cut at the Singapore office.
However, it is clear that the bank has substantially completed 1,000 senior staff exits globally, and the remaining positions in middle and junior levels will be whittled down through attrition. Several bank employees spoke to TODAY on a condition of anonymity and expressed fear on the uncertainty that looms over their future.
Whilst this announcement did not come as shock to many employees at StanChart Singapore and, they were aware of layoffs in the offing. However, there seems to be elevated levels of stress and fear post the final announcement was made.
“We are indeed distracted and confused about what we should do next. We are certainly not in a position to negotiate better salaries with other potential employers. The uncertainty is quite scary. We are neither in a position to pick up nor refuse the not-so-attractive job offers in our hands,” senior-level StanChart Singapore staffer was quoted by Channel News Asia.
Stressing on the gloomy sentiment prevailing around, another senior Standard Chartered staffer said, “The positive thing is that we are getting regular strategy updates from the CEO’s office these days.”
With surplus talent in senior-levels and front-office positions in the market, these executives stand higher risk of being retrenched in the months to come. However, those in business-critical roles such as revenue-generation as well as risk-related, compliance and internal audit positions are relatively safe and are not likely to face the axe.
Besides the job cuts, London-based StanChart is raising US$5.1 billion through a two-for-seven rights issue. The rights shares will be priced at £4.65 (S$10.02) each, or a 35 per cent discount from the last traded price in London.
According to StanChart, this capital raising is aimed at funding a planned US$3-billion investment into strategic opportunities, upgrading regulatory and compliance systems, and technology while strengthening balance sheets.
Owing to growing regulatory costs and rising loan impairments in India, StanChart reported a third-quarter operating loss of US$139 million, swinging from a US$1.5 billion profit in the previous corresponding period. This move by the financial lender is targeted at achieving savings of US$2.9 billion by 2018.
Furthermore, the bank plans to restructure or exit US$100 billion of risk-weighted assets after its expansion strategy in emerging markets such as India failed, leaving the bank saddled with huge debts. China’s economy slowdown and sagging global commodity prices also weighed on the bank’s performance.
Charing the helm of affairs at StanChart from June, CEO Bill Winters expressed disappointment on the bank’s current performance against the backdrop of economic uncertainty with continued challenges presented by the business environment. Anticipating actions that would result in a lean, focused and well-capitalised bank, poised for growth, he plans to move through this transition phase as quickly as possible.