UBS to cut up to 30% of global workforce after Credit Suisse rescue

The bank is expected to lay off as many as 36,000 employees worldwide, according to media reports

Credit Suisse bankers are already in contact with headhunters seeking new jobs. Reuters

UBS will cut its workforce by between 20 per cent and 30 per cent after completing its takeover of Credit Suisse, slashing as many as 36,000 jobs worldwide, SonntagsZeitung reported, citing a senior manager at UBS.

As many as 11,000 employees will be laid off in Switzerland, the Swiss newspaper said. The two lenders together employed almost 125,000 people at the end of last year, with about 30 per cent of the total in Switzerland.

The number of predicted layoffs dwarfs the 9,000 job cuts that Credit Suisse announced before its rescue by UBS last month. It had been expected that final total of layoffs would reach a multiple of that number given sizeable overlap between the two former rivals.

UBS didn’t immediately respond to a call outside of normal business hours seeking comment.

Watch: UBS to buy Credit Suisse

Publicly, UBS has said it will give clarity on job cuts as soon as it can. While it was clear that major layoffs were coming, the lender sees retention of talent as a significant part of the takeover’s execution risk.

Companies such as Deutsche Bank, Citigroup and JP Morgan Chase are gearing up to recruit some of the investment bankers and wealth managers likely to be let go.

Already, headhunters are being swarmed by Credit Suisse bankers seeking new jobs.

The emergency takeover of Credit Suisse by its larger Swiss competitor in a $3.3 billion deal was announced by the Swiss government on March 19 after five days of talks brokered by officials.

Years of scandals at Credit Suisse culminated in massive deposit outflows, which would have seen it collapse the following Monday had action not been taken, according to Switzerland’s finance minister.

The government resorted to emergency law to push through the deal without having to seek shareholder approval. So while the annual general meetings of the two lenders — coming up this week — are expected to hear many angry voices, shareholder impact will be limited.

Important shareholder Norges Bank Investment Management, the sovereign wealth fund of Norway, has announced it will vote against the reelection of several Credit Suisse directors, including chairman Axel Lehmann.

Separately, the Financial Times reported on Saturday that UBS has a shortlist of four management consultants to advise on integrating Credit Suisse.

The bank is soon to decide between Bain, the Boston Consulting Group, McKinsey and Oliver Wyman, the newspaper reported, citing people familiar with the process who weren’t identified.

It’s expected to be one of the most lucrative contracts in years for dispensing financial services advice due to the complex, years-long process needed to meld the banks, according to the report.

UBS, Bain, BCG, McKinsey and Oliver Wyman didn’t immediately respond to requests for comment outside of office hours.