UBS plans to cut more than half of Credit Suisse's workforce, made up of 45,000 workers, in a new phase of the takeover of the Swiss entity. Bankers, traders and support staff at investment banks in London, New York and Asia are in focus, although the impact is expected to hit almost all activities, according to Bloomberg sources.
The layoffs will start at the end of July, with another couple of rounds in September and October. Three months after UBS agreed to buy Credit Suisse in a Swiss government-brokered bailout, the extent of the cuts is beginning to become clear. UBS, whose workforce jumped to about 120,000 when it closed the deal, has said it aims to save about 5.5 billion euros in personnel costs over the next few years.
Bloomberg points out that the objective is to reduce some 35,000 jobs of these 120,000, around 30%.
The purchase took place at the end of March, urgently and sponsored by the State, amid turbulence in the financial sector due to the collapse of several banks in the US. UBS chief executive Sergio Ermotti said the integration was going "very good" at an event in Zurich this Tuesday. Ermotti returned to the Swiss bank in March to lead the union of both firms.
Regarding the domestic business, UBS plans to make a decision in the third quarter. It will decide whether to fully integrate it with its own Swiss unit or look for another way out, such as spinning it off or going public. The fate of the Swiss bank is closely watched as Swiss politicians have raised concerns about the market power the combined bank would wield. Thus, the first rounds of layoffs will exclude Switzerland, where 37,000 people work.
