HSBC has not yet informed the Department of Labour of any plans to downsize its workforce, according to Commissioner General of Labour V.B.P.K. Weerasinghe.

She however added that HSBC will be required to consult the Labour Department before embarking on an extensive layoff, which according to Mirror Business sources, may result in the bank slashing as much as 30% of its workforce in Sri Lanka.

The source went on to state that the bank’s clerical cadre would not be targeted as part of the layoff, due to their membership with banking sector trade unions, meaning that rest of the staff which has no trade union membership will likely take the brunt of job cuts.

The reports of blanket layoffs followed statements from HSBC Sri Lanka and the Maldives CEO, Nick Nicolaou. Hr denied rumors that HSBC would be pulling out of Sri Lanka as part of its global restructuring drive.

During a newspaper interview last month, Nicolaou denied rumors that HSBC would be pulling out of the country, asserting that business in Sri Lanka was continuing to perform satisfactorily.

“I can categorically say that such rumors are unfounded. We have a business model that works well in Sri Lanka. So, our operations in Sri Lanka are in good shape.

We are investing in our business and people. HSBC remains committed and focused on building a strong, sustainable business in Sri Lanka.” Nicolaou said.

Reports of job cuts in Sri Lanka followed t he announcement of a global restructuring programme for the bank, with an estimated 30,000 jobs to be terminated worldwide over the next two years across the UK, USA, Middle East and Latin America alone.

HSBC Sri Lanka currently employs approximately 1800 staff, with a further 1200 being employed at the HDPL Call center.

HSBC Sri Lanka recorded a profit of Rs. 4.76 billion during 2011, as compared with Rs. 4.15 billion in 2010. Total deposits stood at Rs. 142 billion, up from Rs. 129 billion in the previous year.

Of total deposits, fixed deposits accounted for Rs 89 billion with the bank reporting a total asset base of Rs. 241 billion at the end of 2011.

Also, reports of the HSBC’s downsizing occurred at a time when the bank is making international headlines following a scathing US Senate report accusing the bank of a “pervasively polluted” culture that allegedly resulted in the bank acting as financer to clients connected with criminal and terrorist activity.

The bank’s activities in Mexico, Syria, Saudi Arabia, Iran and the Cayman Islands in particular, were highlighted by the Senate’s report.