Some Chicago banking jobs will be lost as HSBC plans to shed positions.
HSBC Finance, part of HSBC Holdings PLC of London, recently announced it would close 800 Household and Beneficial branches and eliminate 6,100 jobs nationwide. The cuts are being made because of rising unemployment and high mortgage delinquencies.
In 2002, HSBC purchased Household International, a company known for catering to those with less-than-good credit. According to an article by the Chicago Tribune, HSBC previously closed 600 Household and Beneficial branches.
Of the 800 branches to be closed, 33 are located in Illinois. These closings will account for about 4,000 job losses. It is unknown exactly how many jobs in Chicago will be affected.
"High levels of delinquency, given rising levels of unemployment, mean that the business model for subprime home equity refinancing is not sustainable," Niall Booker, HSBC Finance Corp. chief executive, said in the article.
"If you look back, it has not been a successful acquisition," Booker added. "In 2003, when the acquisition occurred, nobody would have thought we'd have a global financial crisis and the recession. It's fair to say it was not a core line of business for us at the time. We entered into markets - perhaps with the benefit of hindsight - it was best we didn't."
Along with many other industries, the financial industry in Chicago and throughout Illinois has been affected by the current economic recession. The Chicago-Naperville-Joliet area's financial activities industry employed 289,500 workers during December 2008, according to the United States Department of Labor Bureau of Labor Statistics. This is down from 289,600 workers during November 2008 and a 1.9 percent decrease from last year.
As a whole, Illinois' financial activities industry employed 393,400 workers during December 2008, down from 393,500 workers during November 2008 and a 2.4 percent decrease from last year.
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