Credit Suisse: Clear cut at the Zurich banking center – Economy

It was just two weeks ago that the traditional CreditSuisse is finally history, erased from the price list of the Swiss stock exchange – 167 years after it was founded and a few weeks after the pitiful crash in the spring of this year. After more and more customer money had flowed out in a growing crisis of confidence, the rival UBS had to take over the smaller Credit Suisse – the aim was to prevent a global financial crisis.

Now it is clear what consequences the hectic takeover will have for the workforce, because the UBS prepared according to the Bloomberg news agency massive job cuts at Credit Suisse. From next month, more than half of the approximately 45,000 employees of the former local rival are likely to lose their jobs. According to the agency, bankers, dealers and support staff at the Credit Suisse investment bank in London, New York and some parts of Asia will be particularly affected by the job cuts. But also in Switzerland – especially Zurich – could according to Swiss media around 12,000 jobs will be lost in the medium term.

UBS had signaled from the start that it wanted to drastically downsize the loss-making Credit Suisse investment bank. The money house had in this division in recent years numerous scandals done, and the business has hardly made a profit. The employees had nevertheless received many billions in bonuses. Now, however, no area is safe from cuts, they say. Employees were told that they would have to face three waves of layoffs by the end of the year. The first should come at the end of July, according to informed circles. Further cuts are expected in September and October.

Deutsche Bank courts bankers from Credit Suisse

UBS has already announced that it will reduce personnel costs by around six billion dollars in the coming years. As a result of the takeover of Credit Suisse, the workforce had recently grown to around 120,000 – a banking giant compared to the size of Switzerland, which is why the financial institution cannot avoid job cuts. For comparison: The Deutsche Bank employs 84,000 people.

After all, the integration of Credit Suisse into UBS is going “very well,” said UBS CEO Sergio Ermotti this week. He is happy “that we were able to stabilize the situation at Credit Suisse.” The first decisions have already been implemented, and the new management and the management level below have been defined. UBS plans to announce further progress by the end of the summer.

In any case, the job market for bankers is more difficult than it has been for a long time since the financial crisis. Above all in investment banking Thousands of jobs have recently been lost on Wall Street. During Corona, many banks initially hired massive amounts of new employees because not only was trading booming, but also numerous companies were preparing for takeovers and IPOs and needed advice. Recently, however, business has been paralyzed worldwide, which is why Goldman Sachs, Citigoup, Morgan Stanley and Bank of America are now laying off employees. Meanwhile, the announced job cuts in the US add up to 12,000.

Only Deutsche Bank is currently marching in a different direction. Actually, the largest German money house wanted to concentrate on stable business areas such as the well-behaved corporate customer business, most recently, however, invested the Frankfurt noticeable again in investment banking, especially in advising on mergers and acquisitions. To this end, Deutsche Bank not only took over a stockbroker in London for around 464 million euros a few weeks ago, but is also currently hiring dozens of investment bankers, mainly in Asia and above all from Credit Suisse. This is probably based on the hope that investment banking will pick up again in the third or fourth quarter. Otherwise, it could be expensive for Deutsche Bank, which is already feeling the effects of the sluggish trading business. Even if banking circles estimate the Industry service Efinancialcareers of additional costs of more than 100 million dollars as too high: The new hires should then go into the money properly.

“New York investment bankers with sharp elbows”

However, it could also be expensive for former Credit Suisse executives who are dealing with one Class action by bondholders confronted in New York. In the course of the emergency takeover, the bondholders had to accept a total loss of 16 billion euros. As it became known this week, the plaintiffs accuse them of breaching their fiduciary responsibilities at Credit Suisse. They created a culture that prioritized profits and bonuses over sound business practices. Credit Suisse may originally have been a conservative Swiss financial institution, but most of those responsible for its demise were “New York investment bankers with sharp elbows”. “The beginning of the end for Credit Suisse is in New York,” quoted the Swiss newspaper NZZ from the indictment.