HSBC to shrink office space by 40% as pandemic raises remote working

By Charles Abuede

 

Following the latest sign from the pandemic which is bringing about a change in how people work within the office and from home, Europe’s largest banker, HSBC Holdings Plc has stated that it expects to eventually shrink its property footprint by 40 per cent as it plans to reduce its real estate footprint over a long term.

John Hinshaw, HSBC group chief operating officer, said this on Tuesday in an investor call with analysts after the banking group reported its fourth-quarter results.

Hinshaw said the abrupt shift to remote working in 2020 has sparked a debate across several industries on the demand for office space in the future, of which HSBC’s potential reduction will be one of the most dramatic changes seen so far from the banking group.

“The Covid-19 outbreak taught us many roles can be undertaken effectively outside of our branches and offices, accelerating our focus on enabling greater flexibility in future working arrangements. We expect a change in the way we use our office space, recognizing the work-life balance and environmental benefits of hybrid working arrangements. The bank had made impairments on certain real estate assets in 2020,” HSBC said in its annual report.

Furthermore, the bank revealed that about 85 per cent of the group’s employees are now able to work from home, and stated that at certain times last year, up to 70 per cent of its 226,059 strong workforce were actually working remotely in what saw the lender distributing more than 78,000 laptops and other items to employees so as to enable them to work remotely. The bank said it expects to see a “much greater degree of hybrid working,” as the pandemic is brought under control.

In the meantime, rival firms such as Standard Chartered have already shown sweeping changes when it said last year that about half its staff will be able to apply for some form of hybrid work from early 2021. Standard Chartered stated that it plans to offer flexible work options to more than 90 per cent of its 85,000 staff over three years period.

However, doubters of this trend of remote working include BlackRock Inc.’s Larry Fink and JPMorgan Chase & Co.’s Jamie Dimon, who have said that remotely working for too long could bring about a decrease in productivity. Thus, Barclays Plc’s Jes Staley said last week that he expects his largely homebound bankers to return to their offices in 2021.