HSBC Holdings PLC provides hundreds of millions of additional real estate costs, as it plans to ask more of its employees to return to the office, which could hinder the bank in its attempt to find $ 1.5 billion in annual savings.
The chief executive officer, Georges Elhedery, will have to make a series of decisions in the coming weeks to acquire more office space for lenders of the lender in London, Bangalore, Hyderabad and Guangzhou, the people familiar with the case declared, asking not to be identified to discuss internal deliberations. Securing the space required to support a return to three days a week in these cities would cost around $ 200 million a year, said one of the people.
An HSBC representative refused to comment.
For Eledeery, who has spent the last months of driving the greatest organizational overhaul that HSBC has seen for decades for decades, the question of office space would be the next crucial problem to approach while the lender is preparing to abandon his hybrid work policies of the Pandemic era. The London -based banking giant is considering Ask all its employees to work at one of its offices at least three days a week.
Potential additional expenses represent more than 10% of the money that HSBC hopes to spare its current global restructuring which has seen its commercial and investment banking units combine and close its mergers and acquisitions and divisions for the subscription of shares in the United States, the United Kingdom and in continental Europe.
The expansion of the imprint of the office followed several years during which HSBC had sought to shrink Its global real estate portfolio of 40%. The former CEO, Noel Quinn, even got rid of his own private office as part of the transition to a more hybrid work and converted the bank’s executive stage to its London headquarters in addition to a meeting room, while he opted for Hot-Desk.
Office shortage
The largest financial group in Europe is already faced with a potential lack of 7,700-desk when it moves to a new headquarters in the city of London. He must also take up the challenge of finding more space for his employees in India and China.
With the three -day rule on the office on the cards, HSBC must find nearly 3,000 additional offices in Bangalore, the Indian city where it employs around 12,500 in its global services and its technological units, people said.
In addition to this, 3,500 other offices will be necessary in the city of Hyderabad, in the south of India, where it employs 12,000 other technological roles and support for the world’s world operations, they said. A deficit of more than 3,000 deks is also planned in Guangzhou, in the Southern Chinese port city, where the bank has more than 14,500 employees in similar roles.
Not to acquire the additional capacity would mean that the return mandate to the HSBC office could be dead on arrival, thousands of staff members unable to find an office space in the bank’s buildings.
In London, HSBC is expected to start moving its headquarters from Canary Wharf next year to move to a new building but smaller in the city. If the bank should not increase the imprint of its office at the same time, it would mean that the London -based staff would not be able to find an office space for more than a day and a half each week, according to people familiar with the situation.
To approach the deficit, the bank is already in talks to rent several floors near its headquarters 40 Bank StreetBloomberg News reported This month. He also plans to keep certain satellite offices which he had previously planned to abandon.
In India, HSBC hopes to have new offices ready for staff in early 2027, but to reach these deadlines, he will have to start signing agreements by September, while in China, a lease for more space could be signed during the summer.
Short deadlines highlight the need for Elevye and his management team to get along quickly on the new office back to the office to allow the bank to start dealing with potential capacity problems.
In his hunt for space, HSBC is likely to meet competitors ranging from Wall Street majors to smaller rivals who also seek to evolve their carpet zone after having reduced real estate as a result of the pandemic. But they are also likely to cope with a compression of the offer created by cautious developers struggling with arrow construction costs and higher interest rates.
