Tens of thousands of jobs are anticipated to be lost as a result of UBS's rescue of Credit Suisse, and the tumultuous takeover is already predicted to have a significant negative impact on Switzerland's banking sector.
According to those familiar with UBS's intentions, the domestic operations of Credit Suisse and its investment bank, which together employ more than 30,000 people, are anticipated to take the brunt of the reductions.
These sources noted that, if UBS winds down much of the investment bank and eliminates overlap functions in Switzerland, it was still too early to estimate how many roles will be eliminated, but it may be as much as a third of the 120,000 jobs in the merged group.
The Swiss authorities planned the takeover over the weekend after becoming concerned about the volume of customer withdrawals Credit Suisse was experiencing the previous week.
Bondholder losses and the absence of a shareholder vote on the union in the SFr3bn ($3.25bn) deal have drawn criticism.
Credit Suisse, which had just over 50,000 employees at the end of 2022, was already in the midst of a significant job-cutting campaign, having eliminated 4,000 posts so far this year.
However, if UBS closes down the majority of the operation, it is anticipated that many of Credit Suisse's 17,000 investment bankers will lose their jobs as a result of the acquisition.
According to persons with knowledge of the plans, UBS, which employs 74,000 people globally, will also try to eliminate positions that overlap with Credit Suisse in Switzerland, close branches, and decrease workers in administrative positions.
Following the announcement of the deal on Sunday evening, UBS Chief Executive Ralph Hamers stated they will aim to slash $8 billion in costs annually by 2027, with $6 billion coming from personnel reductions and $2 billion from IT spending.
Last year, Credit Suisse spent SFr8.8 billion on personnel costs.
Credit Suisse's chairman Axel Lehmann and chief executive Ulrich Körner stated in a company message on Monday that no decisions had been taken on job decisions.
In the upcoming term, "We [will] work diligently and at pace throughout the coming period to identify which roles might be impacted," they declared. "Where necessary, we will communicate with impacted individuals in line with country specific guidelines and policies."
The acquisition is anticipated to be finished in the second half of the year.
The domestic business of Credit Suisse, which employs less than 17,000 people, should be spun off, according to the Ethos Foundation, which speaks for institutional investors in Switzerland that control between 3% and 5% of both banks collectively.
"This would preserve jobs and maintain a healthy competition, which would ensure the proper functioning of our economy," according to Ethos.
Separately, the management of Credit Suisse has been urged to form a task force to control the possibility of widespread job layoffs by the Swiss Bank Employees Association.
"There is an enormous amount at stake for the 17,000 or so employees of Credit Suisse in Switzerland — and thus also for our national economy," it stated.
By fLEXI tEAM