UBS Group is planning to cut more than half of Credit Suisse Group’s workforce beginning next month following the bank’s emergency takeover.
Bankers, traders and support staff in Credit Suisse’s investment bank in London, New York, and in some parts of Asia are expected to bear the brunt of the cuts, with almost all activities at risk, sources said.
Staff have been told to expect three rounds of cuts this year, with the first expected by the end of July and two more rounds planned for September and October, the sources said.
Three months after UBS agreed to buy Credit Suisse in a government-brokered rescue, the full extent of the job cuts is starting to become clear.
UBS, whose combined workforce rose to about 120,000 when the deal closed, has said it aims to save about $6 billion in staff costs.
UBS intends to reduce total combined staffing by about 30 per cent, or 35,000 people, one source said.
That is broadly in line with an overall reduction of around 30,000 estimated by analysts at Redburn in a report on UBS this month.
Staffing at Credit Suisse stands at about 45,000, the people said.
A representative of UBS declined to comment on the job cuts.
The cull of staff at the Swiss lender will worsen what was already a dismal year for financial sector jobs worldwide, after Wall Street investment banks including Morgan Stanley and Goldman Sachs Group cuts of thousands of jobs.
The combined firm’s executive ranks already display UBS’s dominance. The executive board contains only one Credit Suisse holdover, Ulrich Koerner, who remains chief executive of the acquired bank.
In the wealth management unit, only five of the more than two dozen leadership appointments come from Credit Suisse.
At an event in Zurich on Tuesday, UBS chief executive Sergio Ermotti said that the integration was going “very well”.
UBS signalled early in the takeover that it intends to cut back the numbers at Credit Suisse’s loss-making investment bank, which was the source of the $5.5 billion loss in the Archegos Capital Management scandal in 2021.
While UBS had originally planned to keep the top 20 per cent of dealmakers, in particular those focusing on technology, media and telecoms, many of the top-performing bankers have departed or been poached by competitors, people said.
Deutsche Bank, Jefferies Financial Group and Wells Fargo are among competitors who have snapped up Credit Suisse staff in recent months.
UBS is hoping to retain the majority of Credit Suisse’s private bankers, although many have already left, two of the people said.
In Asia Pacific, UBS is planning to keep a few hundred Credit Suisse private bankers, bringing its total to more than 1,200, people familiar told Bloomberg earlier this month.
Some private bankers in Singapore are set to relocate to UBS’s flagship offices near a prime shopping district in the city-state as soon as next month in one of the first concrete signs of the merger taking shape.
The bank will also need to retain, at least in the near term, the people responsible for managing Credit Suisse’s structured loans to wealthy clients and the equity derivatives books, one of the people said.
With respect to the Swiss domestic business, UBS plans to make a decision in the third quarter on whether it will fully integrate it with its own Swiss unit or seek another option such as spinning it off or listing it publicly.
The fate of the Swiss bank has been widely watched as Swiss-based companies and politicians have voiced concerns over the market power that the combined bank would exercise.
As such, the initial rounds of job reductions will be likely to exclude those related to the extensive overlap in the Swiss businesses, the people said.
Overall, as many as 10,000 jobs would be eliminated if the two domestic businesses are merged, one person said. About 30 per cent of the megabank’s combined staff are in Switzerland but spread across the domestic businesses as well as employees who are based in the country but work for corporate functions or in wealth and asset management.
Mr Ermotti has said that the “base case scenario” is for UBS to retain Credit Suisse’s domestic unit. Many employees, based on comments from Mr Ermotti and chairman Colm Kelleher in meetings this month, expect the businesses to be fully merged, especially after the deterioration of the private banking arm of Credit Suisse’s domestic business, the people said.