About 1/3 of the employees are likely to be laid off
Ralph Hammers, chief executive of UBS, has expressed the intention to cut the bank's costs by $8 billion every year until 2027.
Tens of thousands of jobs are set to be lost following the takeover of Credit Suisse by UBS, and most will be from the Swiss bank's domestic businesses and its investment arm. This is the assessment of sources close to the relevant talks who spoke to the Financial Times and referred to UBS's plans. They pointed out that the Swiss bank's domestic operations and its investment arm collectively employ more than 30,000 employees, many of whom will lose their jobs. The same sources stated that it would be premature to make any assessment regarding which specialties will be abolished and contented themselves with expressing the assessment that approximately 1/3 of the 120,000 employees they employ are likely to be laid off.
The deal to save Switzerland's second-largest bank from its first has already been criticized for the losses it caused to its bondholders and the fact that shareholders were not consulted or voted on.
The problem it will, however, be much larger when thousands of people lose their jobs.
Credit Suisse was already in the middle of a restructuring plan. At the end of last year the bank employed around 50,000 people and had already started to cut staff. Since the beginning of the year, it has already eliminated 4,000 jobs. With its acquisition, however, it is expected that many of its 17,000 employees employed in its investment arm will lose their jobs. It is, after all, the intention of UBS, which employs 74,000 employees worldwide, to eliminate any jobs that happen to overlap with Credit Suisse. It also plans to close branches within Switzerland and reduce staff in management positions.
In a phone call with analysts as talks to buy Credit Suisse are underway, Ralph Hammers, UBS's chief executive, said he intends to cut the bank's costs by $8 billion annually by 2027. He clarified in fact, that the 6 billion cuts will come from reducing staff and spending a total of 2 billion dollars for research and development in the field of information technology.
During the last year the the cost of Credit Suisse's employees reached a total of 8.8 billion Swiss francs, equivalent to $9.53 billion. However, in their internal communication with the bank's staff, CEO Ulrich Koerner and its president Axel Lehmann they stressed that no decisions have yet been made on which jobs will be cut and who will leave the bank. The Ethos Foundation represents Swiss institutional investors who jointly control between 3% and 5% of the two banks combined. The institution has hinted that it is lobbying the Swiss authorities and UBS to persuade them to spin off Credit Suisse's domestic operations, which employ nearly 17,000 people. As he characteristically pointed out, “in this way jobs will be saved and at the same time the fair competition that ensures the proper functioning of our economy will be ensured”.
