Big banks delay job cuts to deal with virus

March 31, 2020 11:15
Many major lenders such as Citibank have delayed layoff plans as they realize they need more staff to maintain operations amid the coronavirus outbreak. Photo: Reuters

The coronavirus outbreak has put millions of people out of job across the world. However, several leading banks such as HSBC, Citibank and Morgan Stanley have promised to delay their layoff plans. That's because banks are badly in need of human resources at this critical moment.

To maintain the stability of their operations, many banks have resorted to splitting their staff into two teams, one working from home and the other working in the office.

Some banks have also set up a back-up office and allow the two teams to operate simultaneously. The back-up team can take over if something happens to the other team. Under such arrangements, banks need more people than they normally would have.

In recent years, IT support positions have often been targeted for staff cuts or outsourcing as the banking industry tries to reduce costs.

But amid the Covid-19 epidemic, the industry is reportedly hiring more IT staff as they play a key role in setting up and maintaining a network for their colleagues to work from home, teaching them how to use video conference apps, and establishing back-up offices for different departments.

Though this is good news for IT workers, the extra costs could hurt banks' bottom line, adding to the pressure from falling interest rates, which are eating into lenders’ interest margins.

This article appeared in the Hong Kong Economic Journal on March 30

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist