A further 12,000 jobs will be axed globally, meaning about 7% of HSBC`s 266,000 workers will go.
The bank will also sell businesses in Turkey and Brazil, it announced on Tuesday.
HSBC confirmed that it was reviewing whether to move its headquarters out of the UK, and will make a decision by the end of the year.
Speculation has been mounting that the British bank may relocate its headquarters to Hong Kong since it announced the review in April.
The lender said it would reduce its asset base by $290bn (£189bn) in a filing with the Hong Kong stock exchange where it is listed, along with London.
Its Hong Kong listed shares were up 0.6% after the announcement.
Major shake-up
The news comes ahead of a presentation that chief executive Stuart Gulliver will give to investors and analysts in his second major strategy plan since becoming the head of the bank in 2011.
"We recognise that the world has changed and we need to change with it. That is why we are outlining the following... strategic actions that will further transform our organisation," he said in a statement.
The new plan will see the lender try to save annual costs of up to $5bn and make big cuts to its investment bank.
HSBC also set a new target for return on equity to more than 10% by 2017, down from the previous target of 12% to 15% by next year.
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