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Monday, October 2, 2023

UBS To Slash Half Of Credit Suisse’s Workforce As Bank Layoff Tsunami Worsens

Earlier this month, UBS Group AG successfully “completed” the emergency takeover of Credit Suisse. With the merger completed, UBS plans to begin the first phase of a massive headcount reduction of Credit Suisse’s workforce in July. 

The upcoming layoffs should not be a surprise to readers. We have detailed Massive Layoffs On Deck At Credit Suisse and UBS Reportedly Re-Starts Layoffs” following a $3 billion deal, first announced in March and brokered by the Swiss regulators that allowed UBS to purchase the struggling Swiss lender.

As previously noted, UBS CEO Sergio Ermotti has been hush-hush about what’s on the chopping block at Credit Suisse. He was recently brought back to ensure the integration of the two banks, which could take several years, will go smoothly. 

A person familiar with the upcoming layoffs told Bloomberg that half of Credit Suisse’s workforce, including bankers, traders, and support staff across New York, London, and Asia offices, will be fired. There will be three rounds, with the first expected next month and two other rounds between September and October. 

The person stated the headcount at Credit Suisse stands approximately at 45,000. When UBS took over the troubled lender, its workforce jumped to about 120,000. It plans to cut jobs to save $6 billion. Two people said UBS would reduce its headcount by 30%, or 35,000 people. 

The people said UBS hopes to keep most of Credit Suisse’s private bankers. However, many have departed from the bank. 

The people said that the first round of job cuts is related to the “extensive overlap” in both banks’ domestic operations. 

Ermotti has stated that the “base case scenario” for UBS is to keep Credit Suisse’s domestic unit. The people expect businesses to be fully merged. 

An incoming tsunami of bank layoffs at Credit Suisse will add to the thousands of firings this year and last. Bloomberg Vonnie Quinn said Monday that bank layoffs are mounting and quite possibly the worst since the financial crisis

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