HSBC has decided not to implement pay freeze plans this year, in reversal of a cost-cutting decision it made earlier. A memo from its CEO Stuart Gulliver said the pay rises will be funded from a bonus pool originally intended for payments to be made in 2017. A hiring freeze introduced in the fourth quarter of 2015 will remain in place. The bank, which had more than 266,000 staff at the end of 2014, plans annual cost savings of up to $5 billion by 2017. According to Gulliver, following the feedback on the pay freeze and the way it was communicated, he had decided to change the way these cost savings are to be achieved. He said the bank will therefore proceed with the pay rises as originally proposed by managers as part of the 2015 pay review, noting that, consistent with prior years, not all staff will receive a pay rise. Gulliver further added that several of their competitors have recently announced large-scale redundancies, salary freezes, bonus reductions and further cost reduction programs in addition to those already in place and hence it is clear that HSBC is not alone in facing these challenges.
