StanChart Securities starts retrenchment process

Close to 30 people going to be laid off as a part of cost-cutting exercise, says a source

Standard Chartered Securities is set to axe close to 30 jobs from its India business as it is winding down operations in the country. People familiar with the development said retrenchment letters have already been given to a few employees.

“Close to 30 people are going to be laid off as a part of the cost-cutting exercise, whereas about approximately five more will     absorbed in the business. A couple of them would be senior-level executives, whereas the others would be from the mid-level,” said a person familiar with the development. Standard Chartered declined to comment.

Another person privy to the information told Business Standard  the whole process of winding up the business could take up to a month.

“The retrenchment package typically includes three months’ salary, along with a severance package  based on the number of years the employee has served with the organisation,” said the person quoted above.

Standard Chartered Securities (India) has a presence in 19 locations and has 27 branches, according to information on its website.

The lender had mentioned that closing down of the loss-making institutional cash equities, equity research and ECM (equities capital market) operations will impact approximately 200 roles across seven markets. This will also translate into cost savings of around $100 million in 2016.

These restructuring exercises are a part of the group's target to achieve $400 million in terms of cost savings in 2015. The lender said that another $200 million will; come by re-organising the retail client segment. In the retail end, the bank has been slow in replacing positions that are vacant to save on employee cost and has also been closing down branches.

"...the Group's strategy of focusing on key cities and accelerating the switch to digital has resulted in around 2,000 job cuts announced or completed in the last three months, with a reduction of a further 2,000 expected during 2015, primarily to be achieved by not replacing staff when they leave. We have also made good progress in closing 22 branches in the second half of 2014, and expect to achieve the previously announced target of 80-100 closures," the bank said in a statement.

The remaining $100 million will come from from cost savings in other client segments, product groups and global functions, added the release.

Standard Chartered Bank's business has been under pressure both globally and in India in the past one year. It is the largest foreign lender in the country in terms of branch network but in the last financial year, during 2013-14 (April-March), it had seen a 46% decline in its India net profit.