UBS saved Credit Suisse, but put 14,000 India jobs at risk
2 min read 21 Mar 2023, 07:50 PM ISTBoth UBS and Credit Suisse's India-based technology centres are expected to see the maximum impact of the Swiss government-backed takeover of Credit Suisse by UBS
PremiumSwiss authorities may have averted disaster and helped soothe concerns by forcing a merger of the country's two largest banks – the distressed Credit Suisse Group AG and the stronger UBS Group AG – in a government-brokered deal after days of market upheaval. But their actions might have risked jobs of nearly 14,000 Indian employees working at the banks technology back offices across three cities, including Pune.
Both UBS and Credit Suisse's India-based technology centres are expected to see the maximum impact of the Swiss government-backed takeover of Credit Suisse by UBS.
The banks employ about 7,000 people each across three Indian cities in their technology centres, according to a Economic Times report.
Following the merger, UBS is likely to focus on role rationalisation and cost reduction – measures that could lead to job losses at multi-city facilities, locally known as global in-house centres (GIC). UBS will seek to retain only the best talent at CS, the report said.
“India and Pune are likely to be hit by the merger as most of jobs are backend operation jobs and likely to have duplication with UBS," Vinit Deo, founder of financial advisory firm Posiview Ventures, wrote on Twitter.
Though UBS hasn't detailed how many jobs may be at stake from the merger, it indicated the number will be significant. The firm said in a statement that it plans to cut the combined company's annual cost base by more than $8 billion by 2027. That's almost half of Credit Suisse's expenses last year.
'Get back to work'
Promised bonuses and pay increases will still be paid after a tumultuous week that ended in the 166 year-old lender being taken over by its largest rival UBS Group AG, the bank said in a memo to staff that urged them to continue “business as usual."
UBS reminded employees not to divulge any business secrets to their new colleagues, as long as the emergency acquisition hammered out in crisis talks over the weekend hadn’t closed. “Credit Suisse is still our competitor," CEO Hamers wrote in a memo to employees.
“We know that many of you will have been following the intense media coverage over the past 48 hours on the future of Credit Suisse and appreciate the enormous uncertainty and stress that this has caused," Chairman Axel Lehmann and CEO Ulrich Koerner said in the memo.
“Please note that there is no immediate impact on our clients and on our day-to-day working operations," they wrote. “Our branches and global offices will remain open, and all colleagues are expected to and should continue to come to work."
Kelleher said he understood the coming months would be “difficult" for Credit Suisse staff and promised UBS will do what it can to keep the uncertainty as short as possible.
Credit Suisse told staff in an internal memo it will work to identify which roles might be impacted, and “will aim to continue to provide severance in line with market practice." There will be no changes to payroll arrangements and bonuses will still be paid on March 24, the memo read.
The two lenders together employed about 125,000 people at the end of last year, with about 30 per cent of the total in Switzerland.
With agency inputs
