Credit Suisse’s 9,000 job cuts are foretaste of UBS takeover
1 min read 20 Mar 2023, 02:11 AM ISTThat’s only the beginning should the firm be pushed into a takeover by rival UBS Group AG, according to people familiar with the discussions, with one person estimating the final toll could be a multiple of that number
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Even before Credit Suisse Group AG was forced into crisis talks over the weekend, the Swiss lender was in the process of cutting 9,000 jobs in an effort to save itself.
That’s only the beginning should the firm be pushed into a takeover by rival UBS Group AG, according to people familiar with the discussions, with one person estimating the final toll could be a multiple of that number.
The two lenders together employed almost 125,000 people at the end of last year, with about 30% of that in Switzerland. Government-brokered talks to contain the crisis of confidence that has gripped Credit Suisse hit a snag early Sunday, with the firm pushing back against an offer by UBS to buy it for about $1 billion, people familiar with the matter said.
Should a deal be reached, one likely scenario would involve UBS buying Credit Suisse to obtain its wealth and asset management units, while possibly divesting the others, Bloomberg has reported. Switzerland, where about 37,000 of the two firms’ employees are based, could see steep cuts to the group functions of Zurich-based Credit Suisse.
There are also talks about the fate of Credit Suisse’s profitable Swiss universal bank, which is likely appealing to UBS but may leave the domestic banking sector too concentrated. UBS may try and keep the Swiss unit’s private banking business, which accounts for about half the assets overseen for wealthy clients at Credit Suisse.
In Asia, where the two firms rank among the largest wealth managers, a deal carries the risk that clients who currently have money with both firms move part of it to a competitor to avoid having too much exposure to a single firm. Finews estimated that several thousand jobs could be cut there in a deal.
The talks have also raised questions about the investment banking operations that Credit Suisse was planning to spin out under the storied First Boston brand. The lender was already in the process of scaling back the trading operations, and sold its securitized products group.
Credit Suisse Chief Executive Officer Ulrich Koerner said Tuesday he had already cut about 8% of headcount.
