Credit Suisse employees are not alone in fearing for their jobs. UBS bankers are also in for a rude awakening. In an acquisition, at least a third of the acquired company's staff keep their jobs. This is causing increasing uncertainty among the rank and file despite assurances from UBS's top management,

Serge Fehr, the long-time former head of Swiss private banking at Credit Suisse is moving to Geneva-based rival Lombard Odier in August, finews.com reported yesterday.

A little more than a week after the forced takeover of Credit Suisse by the larger UBS, Fehr's move could be a beacon for Credit Suisse employees to join him. The writing is on the wall as they are confronted with UBS's intention to cut about six billion francs in personnel costs by 2027.

Hamers Breaks Silence

The apprehension about the potentially endangered Credit Suisse jobs masks the unease spreading among UBS employees.

To calm fears, UBS CEO Ralph Hamers addressed Credit Suisse staff directly for the first time on Monday. As reported by «Reuters», he said UBS did not acquire Credit Suisse merely to close it down.

Preoccupied for Years

UBS Chairman Colm Kelleher described the takeover of its local rival on March 19 as a tremendous opportunity. Even so, UBS employees cannot assume the mega-deal will leave them unscathed. Observers of the local banking scene indicate UBS bankers are increasingly articulating their fears to others. For some, it is the fear of working for years in a structure preoccupied with itself. Others worry about losing their jobs.

At this early stage of the transaction, the fears might seem exaggerated. But they are not unwarranted. Economists at BAK-Economics calculated the takeover could cost up to 12,000 jobs in Switzerland, not just among Credit Suisse staff. 

Not Dealt a Better Hand

Takeover scripts generally require the acquiring party to keep at least one-third of the employees of the acquired company, explains Reto Jauch, managing partner of executive search firm Schulthess, Zimmermann & Jauch in Zurich. This guarantees the new organization will be functional. «In the case of the UBS/CS transaction, the reverse leads to up to a third of the employees at UBS being at risk, especially in managerial functions,» Jauch said.

Jonas Neff, the co-founder of Biermann Neff, a firm also active in executive search, reports that uncertainty has increased on the UBS side of the transaction. «It's to be expected that current Credit Suisse employees have the better cards to be considered for a job profile in certain areas due to their experience and client contacts.» Current employment at UBS is no guarantee of a future job.

Looking Forward to New Colleagues

UBS emphasizes the potential of the mammoth project. The acquisition creates the world's leading global wealth manager with assets under management totaling five trillion dollars. Hamers said as much on the day the deal was sealed, saying it builds on UBS's strengths, enabling it to serve clients around the world even better and offer them more products. Furthermore, it supports growth ambitions in the Americas and Asia and adds a greater presence in the European business, he said.

He went on to say the bank is looking forward to welcoming new clients and colleagues around the world in the coming weeks. Reading between the lines one can deduce frontline people in wealth management likely have the best cards since UBS and Credit Suisse often operate in a complementary manner, and private bankers with a well-filled Rolodex are in demand. 

The future of investment bankers is less clear because UBS wants to allocate a maximum of 25 percent of the risk-weighted assets on its balance sheet to the business. Numerous overlaps exist in the Swiss branch network and the back-office services, making a major reduction likely.

Restructuring in the European Business

But even UBS's wealth management business is not immune to reorganization, as recently seen in Europe, the Middle East, and Africa (EMEA). As finews.com reported, the business with wealthy Eastern Europeans under Caroline Kuhnert, which had become difficult with the Russia sanctions, was integrated into the Europe region under Christl Novakovic.

There was further rationalization as a result of the takeover, as finews.asia has learned. The post of Sonia Goessi, head of wealth management in Northern Europe, was abolished, although she will remain with the bank until further notice, according to a statement made on request.

Such restructurings usually trigger additional centripetal forces of their own. In the current environment, they could have an even greater impact on employees. The bank is well aware of the tense situation among its staff. According to reports, UBS management is making every effort to provide ongoing internal information and mitigate uncertainties.

Too Much Management

Nevertheless, some employees will not want to wait for the finalization of the takeover, expected in a few months. Talent may be found among them. «Anyone who can offer an exciting business case will also be sought after outside the takeover project,» says headhunter Neff. Smaller competitors have always needed to recruit expertise from their bigger competitors, he says. That will not change.

In the medium term, the situation could be less rosy for those UBS bankers who are not in direct contact with clients. This includes, not least, the management. With the takeover of Credit Suisse by UBS, a great deal of management capacity is entering the labor market, says Jauch of Schulthess, Zimmermann & Jauch. «The Swiss banking industry will not be able to simply absorb this as it has in the past.»

With assistance from Claude Baumann