COLOMBO — HSBC’s decision to withdraw its global service centre operations from Sri Lanka threatens approximately 3,000 direct jobs and a further 500 indirect employment opportunities, dealing a serious setback to the country’s information technology and business process management (IT-BPM) industry.
HSBC Electronic Data Processing Lanka (HDPL), which has operated in Sri Lanka since April 2004, is reportedly preparing to relocate its functions to other international service centres, including facilities in India, the Philippines and the Middle East.
According to a report published by the Daily FT on October 20, employees were informed on October 7 that retrenchments would take place in four stages, beginning in December 2026 and continuing through May, August and December 2027.
The reported withdrawal follows more than two decades of operations during which HDPL developed into a major provider of banking support, financial processing and specialised business services for HSBC’s international network.
The scale of the proposed closure has brought renewed attention to Sri Lanka’s competitiveness as a destination for international service operations, particularly as the country seeks to attract investment and expand foreign-exchange earnings.
Thousands of Jobs at Risk as Operations Move Overseas
Opposition Leader Sajith Premadasa has warned that the withdrawal could result in the loss of 3,000 direct jobs and approximately 500 indirect jobs.
The figures reflect the potential scale of the impact rather than a confirmed final count of employees who will be retrenched. A comprehensive, independently verified breakdown of the affected workforce has not yet been established.
The proposed four-stage withdrawal is expected to begin in December 2026, with the final reported phase scheduled for December 2027.
For the employees concerned, the consequences extend beyond the loss of their current positions. HDPL has provided opportunities in specialised financial services, risk management, data processing and international banking operations, enabling Sri Lankan professionals to develop skills relevant to global financial institutions.
A reduction of this magnitude would also affect the wider employment ecosystem supporting the organisation, including transport operators, catering businesses, security providers, telecommunications companies and commercial property services.
These secondary effects are particularly important because international business service centres support economic activity beyond their direct payrolls.
An Award-Winning Exporter Leaves Sri Lanka
HDPL’s planned departure is especially significant given its established position in Sri Lanka’s services export industry.
The company received the Best Exporter award in the Business Process Management and Knowledge Process Management (BPM/KPM) category at the Presidential Export Awards for the 2024/25 financial year, organised by the Sri Lanka Export Development Board.
It was also recognised as Best Value-Added Exporter of the Year, illustrating its contribution to Sri Lanka’s export services economy.
Far from functioning exclusively as a conventional call centre, HDPL has supported HSBC’s international operations across 24 markets in North America, Europe, the Middle East and the Asia-Pacific region.
Its services have included:
- Fund administration and financial processing.
- Banking transaction processing and operational support.
- Customer due diligence and regulatory compliance.
- Financial crime risk screening.
- Trade transaction processing.
- Specialised financial and business support services.
These activities represent the kind of knowledge-based employment that Sri Lanka has sought to expand as part of its transition towards higher-value service exports.
Losing an organisation with this established operational capability would represent more than the departure of a single multinational business. It would also mean the potential loss of specialised employment, professional expertise and an important connection to international financial markets.
Foreign-Exchange Earnings and Local Businesses Face Uncertainty
The proposed closure has also generated concern about its consequences for Sri Lanka’s foreign-exchange earnings.
Figures circulating in commentary on the decision estimate HDPL’s annual foreign-currency contribution at between US$40 million and US$50 million. However, an independently verified company-level figure has not been established, and these estimates should not be treated as confirmed export receipts.
At an illustrative exchange rate of Rs.300 per US dollar, such an annual amount would be equivalent to approximately Rs.12 billion to Rs.15 billion, rather than the Rs.1.2 billion to Rs.1.5 billion stated in some circulated reports.
The actual effect on Sri Lanka’s external earnings would depend on the company’s recorded service exports, expenditure arrangements and the extent to which activities are transferred rather than replaced domestically.
Beyond export revenue, HDPL’s operations have supported local spending through salaries, commercial premises, technology infrastructure, electricity, internet services, transportation and outsourced business functions.
Its offices at Mireka Tower in Colombo have been an important location for these activities.
A phased withdrawal could consequently reduce demand for several domestic services, although the precise financial impact will require verified information about the company’s expenditure and employment arrangements.
Rising Costs and Competition Put Sri Lanka Under Pressure
The Daily FT reported that rising operational costs and limitations on further expansion were factors behind the reported decision to exit Sri Lanka.
These concerns have sharpened scrutiny of the country’s ability to compete with established international business services destinations, including India and the Philippines.
Such countries offer extensive professional talent pools, large service delivery networks and established infrastructure capable of supporting multinational operations.
The source commentary on HDPL’s departure also identifies several concerns about Sri Lanka’s business environment:
- Labour legislation and the flexibility available to employers.
- Rising operational costs, including taxation, electricity and telecommunications.
- Inflation and its effects on business expenditure.
- Changes in regulations and taxation that can complicate long-term planning.
- Competitive incentives and infrastructure available in alternative locations.
Although these factors warrant examination, the available information does not establish that each contributed directly to HSBC’s decision.
Nor does the relocation, by itself, prove that government policy was solely responsible.
Multinational financial institutions regularly review their operating structures, costs, technology platforms and geographical distribution of services. Determining the precise reasons for this withdrawal would require a fuller explanation from HSBC.
Nevertheless, the potential loss of thousands of skilled positions presents a legitimate policy challenge for the Government, particularly in an economy seeking to expand its technology and professional services industries.
Second Major HSBC Withdrawal in 2026
The reported HDPL exit follows HSBC’s earlier withdrawal from Sri Lanka’s retail banking sector.
In May 2026, Nations Trust Bank completed its acquisition of HSBC’s Sri Lankan retail banking business, transferring approximately 200,000 customer accounts covering deposits, credit cards and retail lending.
That transaction, agreed in 2025, formed part of HSBC’s wider international business restructuring.
The retail banking sale and the HDPL withdrawal are separate developments. The earlier transaction involved customer-facing banking operations, while the latest reported decision concerns the global service centre supporting HSBC’s international activities.
HSBC previously indicated that its corporate and institutional banking operations in Sri Lanka would remain unaffected by the retail banking sale.
The reported closure of HDPL should therefore not be interpreted as confirmation that HSBC is withdrawing every banking operation from Sri Lanka.
Government Faces Questions Over Investment Retention
The scale of the reported HDPL withdrawal creates an important question for Sri Lanka’s economic authorities: what measures can be taken to retain existing international employers while attracting new investment?
Investment policy cannot be assessed solely through announcements of proposed projects or newly signed agreements. Retaining established businesses, supporting their expansion and ensuring that skilled employees have access to sustainable employment are equally important.
The Government may face calls to examine whether operating costs, taxation, workforce policies or infrastructure limitations have weakened Sri Lanka’s attractiveness as an international services destination.
There is also an immediate need to establish what assistance could be made available to affected employees, particularly those whose specialised skills may be transferable to other financial institutions and technology companies.
For a country seeking to rebuild investor confidence, HDPL’s reported departure represents a significant test of its ability to maintain a competitive environment for knowledge-based exports.
The most pressing unanswered questions now concern the final number of jobs affected, the financial value of the operations being relocated, the support available to employees and whether any part of the company’s activities can be retained locally.
Without clear answers, Sri Lanka risks losing not only a long-established international employer but also a substantial pool of professional expertise developed over more than two decades.
