By Sinead Cruise
LONDON (Reuters) -HSBC’s decision to shutter international payments app Zing is likely to trigger around 400 job losses, a source familiar with the matter said, as CEO Georges Elhedery steps up cost-cutting efforts at Europe’s largest bank.
The staff at risk of redundancy will be informed from Thursday, according to the source, who said the approximate 400 figure included a substantial number of non-HSBC external customer support staff.
“Following a strategic review of Zing within the HSBC Group and after careful consideration, we have made the decision to close Zing and integrate its underlying technology platform into HSBC,” a spokesperson for the bank said in a statement.
“HSBC is focused on increasing leadership and market share in the areas where it has a clear competitive advantage, and where it has the greatest opportunities to grow and support our clients,” the statement said.
HSBC did not disclose how many jobs would be lost as a result of the decision.
HSBC launched Zing – a mobile platform focused on cross-border payments – just a year ago, initially targeting UK-based customers using fintech rivals like Revolut and Wise (LON:WISEa), which have sought to undercut big banks with lower transaction fees.
The app was designed to complement HSBC’s Global Money product available to its international Wealth and Personal Banking customers, and to target non-HSBC customers who could help broaden the bank’s traditional customer base.
But management interest in building out Zing to mount a serious challenge to competitors has waned since Elhedery took charge in September, the source said.
Elhedery, who spent a year as chief financial officer at the Asia-focused bank before succeeding Noel Quinn as CEO, is part-way through a sweeping overhaul aimed at streamlining costs, tightening focus and improving accountability of performance.
Further investment in Zing was judged an inefficient use of capital, the source said.
A slew of senior managers has already left HSBC in recent weeks as Elhedery seeks to create a simpler and more dynamic organisation.
Additional lower-ranking job cuts are also expected in the first quarter, with bank management keen to offset headwinds to earnings from lower interest rates, China’s economic chills and geopolitical tensions.
Financial News earlier reported the bank’s decision to close Zing.