By Selena Li and Xie Yu

HONG KONG (Reuters) – China’s CITIC Securities plans to move dozens of bankers from its offshore platform CLSA in Hong Kong to the mainland to cut costs and meet Beijing’s call to bridge income inequality in the financial sector, people with knowledge of the matter said.

In an unusually broad move for an industry where individual relocations are more common, CLSA is expected to demand the investment bankers move to the Chinese mainland with their pay lowered to local levels or face the likely prospect of losing their jobs, three people said.

They declined to be named as they were not authorised to speak with media.

CLSA declined to comment. CITIC did not reply to Reuters’ queries.

CITIC, China’s top investment bank by market value, is pushing for cost cuts in its offshore arm as dealmaking stalls, one of the people said.

The move comes weeks after CITIC cut pay across its investment banking division, lowering base salaries of mainland-based bankers by up to 15%.

China’s well-heeled financial dealmakers have had pay cuts and perks reined in across the sector as their state-owned employers respond to Beijing’s “common prosperity” drive with austerity measures.

Employee income for CITIC’s mainland staff was the highest among all investment banks in China last year, according to the companies’ annual disclosures, reaching 840,000 yuan ($117,107.45) on average per head.

The first batch of CLSA staff marked for relocation is expected to be decided as early as this week, with around a “single-digit” figure within the investment banking division impacted based on a performance assessment, the first person said.

More are likely to be affected in later rounds, the person added.

In the longer term, more than 30% of CLSA’s investment banking workforce of 200 in Hong Kong may receive the offer, a second person said, adding the plan was subject to further changes.

More than 80 dealmakers who have execution and coverage roles for CLSA’s China deals, a majority of whom travel to the mainland very frequently, are among those most likely to be affected, the second person added.

The move would result in a 25% to 50% base salary reduction because dealmakers in Hong Kong are normally offered higher pay than mainland peers, according to the second person.

With economic growth slowing and youth unemployment at a record high, Beijing has stepped up its campaign to root out the lavish lifestyles of the elite in the country’s $57 trillion financial sector.

Bankers have been told not to wear expensive clothes and watches at work and to rein in travel and entertainment expenses.

CITIC and its Chinese and global peers have also faced a challenging market environment that has weighed on dealmaking and trading revenues. Wall Street banks such as Goldman Sachs, JPMorgan and Morgan Stanley have cut some investment banking jobs in China over the last 12 months.

CLSA, founded by Australian and Canadian former journalists in 1986, was once known as a large employer of expatriates in Hong Kong but it lost many of those staff in the years following CITIC’s 2013 purchase of the bank.

($1 = 7.1729 Chinese yuan renminbi)

(Reporting by Selena Li and Xie Yu in Hong Kong; Editing by Jamie Freed)

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