Credit Suisse’s bailout will result in tens of thousands of redundancies, with the Swiss financial sector bracing for a major blow after UBS took over the troubled bank.
The domestic operations of Credit Suisse and its investment bank, which employs more than 30,000 people, should bear the brunt of the cuts, according to sources familiar with UBS management’s plans, the Financial Times reports.
The same sources added that it was too early to say how many employees the firm would cut. However, it could be about a third of the combined group’s 120,000 people as UBS shuts down much of the investment bank and cuts overlapping jobs.
Credit Suisse, which employed slightly more than 50,000 people at the end of last year, was already on the cutting edge, with 4,000 layoffs this year. Following the takeover, many of Credit Suisse’s 17,000 investment bankers will lose their jobs as UBS closes much of the unit.
UBS branch closure
UBS, which employs 74,000 people worldwide, will also seek to eliminate Credit Suisse’s overlapping positions in Switzerland, close its branches and cut administrative staff. According to the announcement of the bank’s management, UBS will try to reduce costs by eight billion dollars a year until 2027, whereby six billion will come from reducing the number of employees and two billion from reducing IT spending.
Credit Suisse spent 8.8 billion francs (about $9.4 billion) last year. In a memo to staff on Monday, the bank said any job decisions still needed to be made. The association of Swiss bank employees called the Credit Suisse management team to set up a task force to manage the risk of mass layoffs, warning that it is a matter of the national economy.
