UBS’s rescue of Credit Suisse is expected to result in tens of thousands of job cuts, with Switzerland’s financial sector already bracing itself for a heavy hit from the contentious takeover.
Credit Suisse’s domestic business and its investment bank, which collectively employ more than 30,000 staff, are expected to bear the brunt of the cuts, according to sources familiar with UBS’s plans.
These sources added that it was too early to quantify how many roles would go, but it could be as much as a third of the 120,000 jobs in the combined group, as UBS winds down much of the investment bank and removes overlapping roles in Switzerland.
“The takeover threatens job cuts on a scale that the labour market in the banking sector cannot absorb,” said the Swiss Bank Employees’ Association on Tuesday, calling for redundancies to be paused until the end of the year.
The deal was orchestrated by the Swiss authorities over the weekend after they became alarmed at the rate of customer withdrawals which Credit Suisse was suffering last week.
The SFr3 billion (€3 billion) deal has been criticised for the losses incurred by bondholders and the lack of a shareholder vote on the union.
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Credit Suisse, which at the end of 2022 employed just over 50,000 people, was already in the middle of a wide-ranging job-cutting drive, with 4,000 positions slashed so far this year.
But the takeover is expected to result in many of Credit Suisse’s 17,000 investment bankers losing their jobs as UBS winds down most of the unit.
UBS, which employs 74,000 staff globally, will also look to remove overlapping Credit Suisse roles in Switzerland, close branches and reduce staff in administrative positions, according to sources.
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In a call with analysts on Sunday night following the announcement of the deal, UBS chief executive Ralph Hamers said they would try to remove $8 billion of costs a year by 2027, with $6 billion coming from a reduction in staff and $2 billion on IT spending.
Credit Suisse spent SFr8.8 billion on staffing costs last year.
In a staff memo on Monday, Credit Suisse chief executive Ulrich Körner and chair Axel Lehmann said any decisions over jobs had yet to be made.
“We [will] work diligently and at pace throughout the coming period to identify which roles might be impacted,” they said. “Where necessary, we will communicate with impacted individuals in line with country-specific guidelines and policies.”
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The takeover is set to be completed in the second half of the year.
Ethos Foundation, which represents Swiss institutional investors that collectively own between 3 per cent and 5 per cent of both banks, said it was pressing Swiss authorities and UBS to spin off Credit Suisse’s domestic business, which employs just under 17,000 people.
“This would preserve jobs and maintain a healthy competition, which would ensure the proper functioning of our economy,” said Ethos.
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Separately, the Swiss Bank Employees Association has called on Credit Suisse’s management team to set up a taskforce to manage the risk of mass job cuts.
“There is an enormous amount at stake for the 17,000 or so employees of Credit Suisse in Switzerland – and thus also for our national economy,” it said. – Copyright The Financial Times Limited 2023