HSBC spent nearly $70 million on severance last year, completing its largest reduction of senior bankers since the financial crisis. The bank is in the midst of a sweeping restructuring that includes shutting down core parts of its investment banking division. Company filings reveal that Europe's largest bank cut 134 of its most senior employees—classified as material risk takers—last year, accounting for roughly 10% of that group, with total severance payments reaching $67.5 million.

An analysis of regulatory filings and corporate reports shows this marks HSBC's biggest annual reduction of material risk takers since the 2008 financial crisis, significantly outpacing the layoff efforts of other European banks in 2025. The job cuts come as group chief executive Georges Elhedery pushes ahead with major reforms to the investment banking business, including the closure of its M&A advisory and equity capital markets advisory operations in the US, UK, and Europe.

Material risk takers are senior employees whose roles are deemed to have a substantial impact on a bank's risk profile, with most concentrated in investment banking and trading divisions. A person familiar with HSBC said the reduction in material risk takers is a bank-wide "major trend," not limited to the investment banking unit. Elhedery has previously indicated that the reforms would focus on eliminating "redundant and overlapping" roles within the bank.

The filings show that HSBC's headcount reduction has driven the biggest wave of layoffs among high-paid bankers at Europe's top banks since the 2020 pandemic. Santander and Deutsche Bank followed closely behind HSBC, cutting 49 and 48 material risk takers respectively last year, while BNP Paribas and Barclays trimmed 39 and 32 senior bankers over the same period.

Société Générale paid the highest average severance per departing material risk taker last year at €870,000, followed by Santander at €736,000 and Deutsche Bank at €437,500. Santander also recorded the industry's single largest severance payout, handing one banker €8.3 million in exit compensation.

When banks undergo restructuring, they often prioritize cutting high-cost senior roles to maximize cost savings. In recent years, several European banks have launched large-scale reorganizations, while others have reshaped their investment banking units to adapt to changing market conditions. Geopolitical turmoil has boosted market volatility, benefiting trading operations at Europe's major investment banks, but the recovery in capital markets advisory has been slower, with European trading activity continuing to lag behind the US.

Although UBS paid the lowest total severance to its material risk takers last year across the industry, the group as a whole paid $942 million in severance to more than 7,500 employees, a one-third increase from the prior year. UBS is now nearing the completion of its integration of former rival Credit Suisse. The Swiss bank's average severance per employee in 2025 stood at $125,000.