Today′s announcement of HSBC layoffs 2011 of 30,000 workers follows a series of major bank layoffs that began with Goldman Sachs. Goldman is reducing its workforce by 1,000, mostly in the United States, as it moves many operations to Singapore, just in time to avoid aspects of the Dodd-Frank Act of 2010. Others banks, like USB and Credit Suisse, are also following suit. But today′s news from HSBC is the largest to date, which includes selling off some 195 branches in New York State to First Niagara Bank, in a move that appears one for HSBC to get out of retail banking altogether in America. Chief Executive Stuart Gulliver looks to dump half of their branches in the U.S., as well as Russia and Poland and scaling back insurance operations. More emphasis will focus on Latin America, namely Brazil, the Middle East, Asia and India. HSBC Holding PLC in Hong Kong will play a more prominent role in the future as further HSBC job cuts in North America loom by 2013.
This, along with more bad economic news of the ISM report, showing U.S. manufacturing index decline from 55.3 in June to 50.9 in July helped squash a rally in the Dow Jones Industrial Average after an overseas bumped the DJIA up some 140 points on news of the debt ceiling deal. By mid-afternoon, the Dow was in negative territory, down over 100 points. A late session rally almost put the DJIA in the positive when House Speaker John Boehner held a press conference, demonstrating genuine leadership and confidence. The Dow closed down just 11 points.
Fears of a double-dip recession have grown the past week following the latest Commerce Department report on U.S. GDP growth. The 2nd Quarter was rated at an anemic 1.3% annual growth rate in the Gross Domestic Product. Even more shocking was a revision of 1st Quarter rate of 1.9% down to a measly 0.4% growth rate. Ideally, a 2.5% annual growth rate is deemed necessary just to stay even. This Friday will be the Labor Department′s latest unemployment rate numbers for non-farm sector. Given that in June, only 18,000 non-farm jobs were created will probably mean another increase in the national unemployment rate, currently at 9.2% Likewise, the poor growth as evident in June will most likely mean that the next Commerce report on GDP will revise 2Q down as well, possibly even into the negative. Considering the rate of inflation, GDP is already in the negative this year, and one can say honestly that we are indeed in a double-dip recession. Unless, of course, you want to be really honest and admit that there never was a recovery in the first place that Obama and Biden claim, and we are in fact in a depression.
So here we are with HSBC layoffs 2011 of 30,000 workers, mostly from the United States as they sell off half of the bank branches. Some 195 are being sold to First Niagara Bank n New York. HSBC Holdings PLC Chief Executive Stuart Gulliver is just following a pattern begun by Goldman Sachs, and copied by USB and Credit Suisse in moving more operations to Asia, Latin America and the Middle East. India and Hong Kong will become major centers for the banking industry which is looking to avoid aspects of the Dodd-Frank Act of 2010. HSBC did report record profits of over $11 Billion dollars, yet more HSBC job cuts are in store by 2013. Thank you, Barack Obama and the Democrats for focusing on jobs. Too bad your policies are costing us jobs, not creating more.