The risk of returning pushing to HSBC’s office risks stopping the CEO’s savings plan

The CEO of Georges Elhedery will need to make a series of decisions in the coming weeks on whether to acquire more desk space for lenders’ staff in London, Bangalore, Hyderabad and Guangzhou. One of the people said that having the space needed to support the return to three days a week in these cities would cost around $200 million a year.

A representative from HSBC declined to comment.

For Elhedery, who has spent the past few months, for those who have driven the biggest organizational overhaul of HSBC for decades, the issue of office space is the next important issue to tackle as lenders prepare to abandon their pandemic-era hybrid work policies. That’s the London-based bank giant. I’m considering Ask all employees to work from one of the offices at least three days a week.

Potential additional spending is that over 10% of HSBC wants to close mergers and acquisitions and equity underwriting divisions in the US, UK and continental Europe, and save from ongoing global restructuring.

The expansion of the office footprint continues after years HSBC was aiming for Shrink Its global real estate portfolio is 40%. Former CEO Noel Quinn removed his private office as part of a transition to more hybrid working, converting the London headquarters bank’s executive floor into more meeting room space as he chose a hot desk.

Lack of desks

Europe’s largest financial group is already potentially facing a shortage of 7,700 desks as it moves to its new headquarters in London. It also needs to square it along with the challenge of finding more space for employees in India and China.

People said that because of the three-day office rules on the card, HSBC will need to find almost 3,000 additional desks in Bangalore, an Indian city that employs around 12,500 people in global services and high-tech units.

In addition to this, the South Indian city of Hyderabad will need another 3,500 desks and employ an additional 12,000 people in the role of technology and support for the bank’s global business. Guangzhou, a port city in southern China, is also projected to have a shortage of over 3,000 desks. The bank employs more than 14,500 staff in similar roles.

Failure to acquire additional capabilities could result in HSBC’s return mandate to the office potentially dying upon arrival, with thousands of staff unable to find desk space in the bank building.

In London, HSBC will begin moving from Canary Wharf headquarters next year and relocate to a new, but smaller building in the city. If the bank doesn’t increase the office footprint at the same time, that means London-based staff will not be able to find desk space for more than a day and a half each week, according to people familiar with the situation.

To address the shortage, the bank is already in discussions to lease several floors near its current headquarters and has made an offer to take up all the free spaces 40 Bank StreetBloomberg News It has been reported this month. They are also considering keeping several satellite offices that they had previously planned to give up.

In India, HSBC hopes to prepare staff with new offices in early 2027, but to reach these deadlines, deals must be signed by September, while in China, more space leases may be signed in the summer.

The short deadline highlights the need for Elhedaly and his management to quickly agree to a new return strategy to allow banks to begin addressing issues of potential capabilities.

In the space hunt, HSBC could run into competitors ranging from Wall Street majors to small rivals looking to expand their carpet areas after cutting real estate in the aftermath of the pandemic. But they could also fight the squeeze of supply generated by careful developers working on rising construction costs and higher interest rates.