HSBC is facing a costly office space conundrum as it prepares to bring more staff back into the office, despite having significantly downsized its property footprint in the wake of the pandemic.
The bank — Europe’s largest — now finds itself with so little planned workspace in London that, once it moves into its new office near St Paul’s Cathedral in 2027, staff will only have enough desks to be present one and a half days per week, well short of the three-day minimum now being pushed by management.
The issue is not limited to the UK. HSBC is reportedly grappling with similar desk shortages in India and China, particularly in its operations hubs in Bangalore, Hyderabad and Guangzhou. Expanding office capacity to meet its new hybrid working targets could cost up to £150 million a year, according to insiders quoted by Bloomberg.
The situation presents an early headache for new chief executive Georges Elhedery, who took the reins last autumn and is currently leading a global restructuring aimed at delivering £1.1 billion in annual cost savings. HSBC has so far declined to comment.
The looming space crunch is a direct result of the bank’s aggressive post-pandemic downsizing strategy under former CEO Noel Quinn, who in 2021 said HSBC would cut its global office footprint by 40%, citing a “very different style of working” post-Covid. The following year, the bank confirmed it would vacate its landmark Canary Wharf tower and move into a new, much smaller headquarters at BT’s former HQ on Newgate Street, near St Paul’s Cathedral.
That building is roughly half the size of the Wharf skyscraper and was selected during a period when hybrid and remote working were seen as the future of white-collar employment.
But Elhedery’s administration has taken a different tone. While full-time office mandates are not expected, there is now a push for staff to be present at least three days a week — a reversal that has raised serious doubts over whether the bank’s future real estate plans can cope.
To plug the gap, HSBC has reportedly started scouting for additional floorspace close to its upcoming City headquarters and is even considering staying on in Canary Wharf — in a different building — to supplement capacity. One option under discussion is leasing space in 40 Bank Street, a vacant building just five minutes from the current HSBC HQ.
Real estate agents familiar with the talks say a deal is far from done, but the bank’s re-engagement with Canary Wharf — just two years after announcing its departure — underscores how quickly attitudes toward remote work have shifted, and how difficult it is for major employers to balance cost-cutting with evolving workplace expectations.
The dilemma is emblematic of a broader trend across the City, as firms grapple with mixed hybrid models, rising operational costs, and the cultural tug-of-war over where — and how — work happens in the post-pandemic era.