Credit Suisse to lose over 9000 jobs post UBS acquisition to cut costs
Credit Suisse, the Swiss investment banking company, is reportedly planning to cut over 9000 jobs to save itself from collapsing, ahead of the takeover brokered by the government.
According to sources, rival UBS decided to acquire the struggling bank, with one person estimating the eventual cost to be a multiple of that figure.
Apparently, there are major overlaps as a result of the merger.
By the end of 2022, the two lenders had a combined workforce of approximately 125,000, with around 30% of those workers residing in Switzerland.
UBS chairman, Colm Kelleher indicated that the number will be large, although it is too soon to estimate how many jobs would be sacrificed. As per a statement released by the bank on Sunday, the merged company’s annual cost base will be reduced by over US$8 billion by 2027. Supposedly, that will constitute nearly 50% of Credit Suisse’s expenses in 2022.
Notwithstanding concerns about the local market concentration, Kelleher stated that the bank was committed to preserving Credit Suisse’s successful Swiss unit. He also made it apparent that UBS is more enthusiastic about Credit Suisse’s asset management division than its investment bank.
Sources further reveal that the investment bank will undoubtedly shrink, putting an end to hopes of a CS First Boston spin-off.
The UBS chairman acknowledged that the upcoming months would be tough for the Credit Suisse workforce and stated that UBS will make every effort to minimize the uncertainty.
Apparently, Credit Suisse warned colleagues in an internal memo that it will endeavor to identify which functions might be affected and will strive to continue to give compensation in accordance with market practice.
Credit Suisse also stated that it is not anticipating any changes to any earlier agreed-upon upfront cash awards and that it is going to pay the cash portion of the transformation award that was previously communicated. Any effect on the equity component will be confirmed.
Source credit: https://www.straitstimes.com/business/credit-suisse-s-9000-job-cuts-are-foretaste-of-ubs-takeover