Turnarounds

Standard Chartered to Cut 1,000 Senior Managers

Under new CEO Bill Winters, the U.K.-based bank has been streamlining operations amid a slumping share price and tighter regulation.
Matthew HellerOctober 9, 2015

U.K.-based Standard Chartered bank said Friday it is cutting a quarter of its senior management, or 1,000 jobs, as it continues to streamline its operations amid a steep drop in its share price.

The cuts are part of a plan announced by new CEO Bill Winters in July to realign Standard Chartered’s management and cut costs by $1.8 billion by the end of 2017. Winters was hired in June to bolster shareholder returns after three profit warnings in quick succession dented the share price.

The stock rose 5% to 787.60 pence, or about $12, in trading Friday in London.

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“Our situation requires decisive and immediate action,” Winters said in a memo to staff explaining the cuts. “Each member of the management team has a mission to drive through improvements in our returns and part of this will be further streamlining of our organization.”

Winters said about a quarter of senior managers, of director level or above, would be cut. There are about 4,000 bankers in the grades affected by the decision.

“Over the last decade Standard Chartered expanded fast, growing aggressively to number around 86,000 staff around the world,” The Wall Street Journal noted. “Now, like other European-based lenders, the bank is being forced to rethink its business model to boost returns amid the bleaker global economic outlook and tighter regulation.”

Standard Chartered is under particular pressure, the WSJ said, because of its exposure to a slowdown in emerging markets and the collapse in commodities prices.

In August, the bank cut its dividend in half and Winters said he was monitoring its South Korea and wider Asian retail business as part of a strategic review. In the first half of this year, profit declined 37%, reflecting currency fluctuations, exits from several businesses and lower valuations on loans.

Standard Chartered said in August that it had reduced its work force by 5%, or about 5,000 jobs, since the end of 2014.

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