Credit Suisse boss Tidjane Thiam sees more job cuts as one key step to slashing spending at Credit Suisse. What did he have to say about how and where?
The Swiss bank hiked its target for cutting spending earlier on Wednesday, saying it will now take 4.2 billion Swiss francs off its costs in the next two years, from a previous 3.2 billion franc target for cuts. CEO Tidjane Thiam says Credit Suisse has cut 6,050 jobs so far this year, above its target of 6,000 for 2016.
According to its own quarterly results, the net effect of the bank’s efforts through the third quarter translate to 510 fewer full-time staff, compared to the end of last year, leading to the conclusion that mainly contractors and external staff have been dispensed.
Thiam outlined a dual approach to the bank's spending, which totaled more than 23 billion francs last year: cut jobs outright, while investing in technology that will lower the bank’s requirements for staff.
«This Will Not Stop»
How does that work? Thiam refused to outline upcoming specific job losses, beyond saying that the cuts made this year «will not stop».
«We have corresponding plans and we know what we’re going to do but we don’t find it helpful to comment on it,» Thiam told journalists ahead of the investor day when asked to predict specific areas and divisions set for job cuts.
He also highlighted technology as a means to make the bank more efficient.
Credit Suisse will have introduced a single client view by year-end, a means to more simply and efficiently onboard new clients, and start winning business off them. In short, fewer staff will be required to do the same business.
Broad-Based Cuts
If Thiam was criticized for being short on specifics when he unveiled his restructuring last October, clearly he has found his bearings now. «We are much more confident than we were one year ago on our ability to analyze our business and take out costs,» he said.
However, the cuts he has revealed thus far are largely broad-based, and not structural in nature – something industry experts have urged banks to do, as most other industries have, if they want to remain competitive.
Thiam made the case for more cuts due to poor financial markets and trading revenue as well as the jittery nature of geopolitics, including Britian’s vote to leave the European Union and the U.S. election of real estate tycoon Donald Trump as president.
