In these times of slowdown most organizations are following the practice of cost-cutting and turning off employees. Even HSBC India has unwaged employees from its recently acquired broking house in Mumbai, Investsmart.
Employees in the merchant banking and institutional business divisions of Investsmart have been laid off by the company. Amongst the laid off employees some have been retained or promised alternative job profiles within the group while some around 15 to 20 employees have been asked to find out their own ways.
HSBC India has sent the employees on a paid leave of one month and plans to terminate their employment if the employees do not quit during this notice period.
In May 2008, HSBC India acquired Investsmart by taking over the stake of US-based online broking firm E*trade and IL&FS. An employee of Investsmart's merchant banking division said, "They have been maintaining all along that we will be absorbed in HSBC's Investment banking team." He also complained that since the time Investsmart has been taken over by HSBC India, employees' number has declined from around 2,200 to 1,600.
On the other hand a spokesperson from HSBC said, "Investsmart assesses its businesses and business strategy on an ongoing basis. If, as a result, staff is freed up from one activity, an effort is made to deploy them in other businesses and activities. Some staff members have been redeployed, while efforts are being made to seek opportunities for others. Current dynamic market conditions require that every organisation's business strategies be flexible enough to take on emergent challenges and opportunities."
However the concerned employees feel that the firm should have instead cut the salaries of senior officials in order to cut its cost. Some of the erstwhile E*trade executives have still been retained at high salaries at the cost the employment of such employees.
Now there are fears that employees from retail business division of the brokerage may also face similar trim in their employment. Above there are rare options for these employees as the market scenario is low. A concerned employee from the outfit also said, "Markets are bad and not many financial services companies are hiring."