In a major development within the Swiss banking sector, UBS, the leading Swiss banking group, is reportedly planning to cut a staggering 35,000 jobs at Credit Suisse. This decision comes as part of the emergency rescue takeover executed by UBS after Credit Suisse faced a near-collapse earlier this year, leading to concerns about its solvency. Bloomberg News reported on Tuesday that UBS intends to reduce more than half of Credit Suisse’s workforce in a bid to address overlapping activities and stabilize the financial institutions. Before the crisis struck, Credit Suisse employed approximately 45,000 individuals.
However, in the face of mounting investor fears, the Swiss government orchestrated a substantial bailout to rescue the troubled bank. Financial analysts had already cautioned that significant job losses were likely due to the extensive overlaps between the two influential global banks. When approached for comment, UBS declined to provide a statement regarding the reported job cuts, as conveyed by AFP. At the end of last year, the combined total of employees from UBS and Credit Suisse stood at approximately 120,000, with 37,000 based in Switzerland alone.
Sources familiar with the matter, cited in the Bloomberg report, revealed that employees have been informed about three waves of job cuts scheduled for this year. The first wave is expected to take place at the end of July, followed by subsequent cuts in September and October. UBS CEO Sergio Ermotti had previously cautioned that the forthcoming months would be challenging, hinting at the need for difficult decisions as the merger progresses. He emphasized that the integration process would entail multiple waves of tough choices, particularly with regards to employment.
This significant downsizing move by UBS highlights the seriousness of the situation at Credit Suisse and demonstrates the measures being taken to stabilize the bank after its recent crisis. While the job cuts are undoubtedly distressing for the affected employees, it is an unfortunate necessity for the long-term viability and stability of both institutions. The Swiss banking sector, renowned for its global prominence, is now facing a critical phase that will reshape its landscape and define its future trajectory.