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Bank layoffs cast shadow on mainland

By Wang Zhenghua (China Daily)
Updated: 2008-11-19 09:28

HSBC branch in Beijing. The bank said yesterday it will lay off 500 employees in Asia. [File photo]

The spate of layoffs in the banking sector has sparked fears of job losses amongst Chinese employees working in banks and financial houses.

Although no foreign bank has cut mainland jobs to date, "it is only a matter of time before they start doing so", said a junior manager at the Shanghai branch of DBS Bank.

The Singapore bank had earlier said it would cut its global workforce by 6 percent, or 900 jobs, by the end of this month, to reduce costs after reporting a fall in third quarter net profit.

The scale of DBS Bank layoffs, however, pale in comparison to many other global banks, notably Citibank. The US bank has said it will cut 52,000 more jobs globally next year, a sharp rise from a target of 23,000 announced earlier. HSBC, the largest bank in Europe, said yesterday it will lay off 500 employees in Asia, 90 percent of them in Hong Kong.

Banking industry experts, however, feel that worries about job cuts by foreign banks in the mainland are exaggerated. Most of the banks will continue their expansion drive in China as it is relatively less impacted by the economic downturn, they said.

A Citibank spokesman said yesterday that the bank would "continue to grow business in China in the most efficient and productive way possible".

But these reassurances have not assuaged the concerns of many local bank employees. "The layoff details are highly confidential and everyone, except perhaps the top guys, could lose their jobs," said a DBS manager on condition of anonymity. He said the bank may opt for job cuts or pay reductions, with job cuts being the most preferred option.

Employees in businesses like home mortgage financing and personal wealth management are particularly vulnerable to layoffs due to the property market slump and the poor performance of many investment products.

The economic woes have also come as a blow to many college graduates who had pursued dreams of working in the financial sector.

Luan Shan, who will graduate from Shanghai University of Finance and Economics next year, said she has lowered her salary expectations from 5,000 yuan to 3,500 yuan.

"Teachers in charge of graduates told us to accept any job offer that comes our way. There won't be better ones," Luan said.

But Pan Zhengyan, a researcher at Shanghai Academy of Social Sciences, said China is still better placed than most of the other markets in combating the global meltdown.

Bank of East Asia is one of the few banks that is seeking to buck the trend. It launched a talent search program on Monday in universities in major cities.