HSBC Holdings Plc(NYSE:HBC) plans to retrench 3,000 employees in Hong Kong as a part of its previously announced strategy to restructure business and shed 30,000 positions from its worldwide workforce by 2013. The plan announced in early August aims to cut cost by $2.5–$3.5 billion over the next two years.

HSBC has a significant presence in Hong Kong and is the city’s largest consumer bank by deposits. Though Hong Kong’s unemployment rate fell to 3.4% in the May-July period from 3.5% in the April-June period, there could be a rise in the rate due to the volatile global outlook.

Furthermore, with its plan to lay off employees in Hong Kong, HSBC presents a picture that the Asia region, once touted as the key future growth driver, is not immune to job cuts and restructurings.

Earlier this year, HSBC commenced the restructuring measures in Latin America, the U.S., the UK, France and the Middle East with headcount reduction of 5,000. Additionally, HSBC announced a number of closures and disposals, which included the shuttering of its retail businesses in Russia and Poland and the removal of three insurance businesses.

In the U.S., HSBC progressed on the strategic review of its credit card business and announced the sale of 195 non-strategic branches, principally in upstate New York, to First Niagara Financial Group Inc. (NASDAQ:FNFG) for $1 billion in cash.

Furthermore in August, Capital One Financial Corporation (NYSE:COF) announced a definitive agreement to buy HSBC’s U.S. credit card business for $32.7 billion. The deal will help HSBC reap an estimated post-tax gain of $2.4 billion. Besides, the company is also planning to divest its Canadian retail brokerage business.

Going forward, HSBC expects the growth in the U.S. and Europe to remain sluggish as long as the impact of high debt levels and government budget cuts weigh on economic activity. In the UK, HSBC remains concerned that the regulatory activities under contemplation and the ongoing regulatory uncertainty will constrain the supply of credit to the real economy, and result in sub-par economic growth.

Besides HSBC, other major banks are also resorting to job cuts in an effort to reduce costs in the light of the challenging market conditions in the U.S. and Europe. We expect the global banks to continue trimming workforce in the next couple of years until the economy improves substantially in these regions. Although the retrenchment strategy looks good for the near-term, the companies cannot rely on it forever.

Currently, HSBC retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.