HSBC Job Cuts Before Bonus Announcements

As HSBC’s bonus day nears, employees are facing the unsettling reality of job cuts right before bonuses are revealed. This has become a troubling trend at the bank. If you’ve had a good year, the expectation might be a nice payday, but for some, that’s not the case.

Recently, the bank’s stock sales and trading teams have seen some significant departures. James Grafton, who was the global head of cash equity trading, along with Steve Jober, the EMEA head of cash equity trading, are reportedly leaving the firm. Bonuses for employees will be announced shortly, which makes their exits quite noteworthy.

Neither Grafton nor Jober responded to inquiries about their departures. HSBC, while not commenting on individual cases, stated that it is focused on attracting and retaining talent in alignment with its performance-driven culture.

This leaves some wondering if Grafton and Jober simply didn’t fit into that culture—though insiders argue this isn’t accurate. In reality, their division performed well, achieving a remarkable 10% more than its targets, especially in Europe.

So, why the redundancies? There’s speculation that HSBC is trimming senior roles to bolster its bonus pool. Ed Duggan, who leads the bank’s global physical equities business, might gain more funds to distribute to his team now that the high salaries of Grafton and Jober are gone.

This may be positive news for those holding HSBC stock, but it also indicates more changes for a bank that’s experienced quite a bit of restructuring lately. Rob Crane, the former head of EMEA equities, retired last July. Interestingly, Grafton joined HSBC from Morgan Stanley in Hong Kong in 2018, making his way to London in 2021. Jober, who came on board a couple of years later, was hired under Grafton’s influence. Additionally, he was part of a group of former Credit Suisse stock traders recruited by HSBC.

There were also complaints from equity experts in Hong Kong last year about the perception that operations were run mainly from London. Following a surprise strategic shift to Asia and the Middle East, HSBC also pared down its equity capital markets (ECM) business in the UK and US. There had been hopes that this would lead to more focus on Asian markets, but since then, HSBC has struggled to secure roles in major IPOs, largely due to its ECM absence in London.

With the exit of Grafton and Jober, there’s an increased expectation for scrutiny within HSBC’s EMEA equity trading segment, especially since much of the research team was cut last year. Duggan appears to be developing the electronic trading platform with help from colleagues, including Fabio Martinelli, who joined from Virtu back in 2018. However, Jober was instrumental in maintaining relationships with hedge fund clients, which had been critical for the success of the cash stocks sector, and now, that’s a gap the firm will need to fill.