UBS is said to be planning on three rounds of job cuts starting in July. More than half of Credit Suisse's workforce is to be eliminated.
After UBS took over Credit Suisse in March on the orders of the government, its workforce grew to about 120,000. That number is set to shrink by around 30 percent, corresponding to 35,000 jobs, starting in July as the first of three rounds of planned cuts. Additional rounds will follow in September and October as part of UBS's goal of saving $6 billion in personnel costs in the next years.
The cuts are expected to fall heavily on bankers, traders, and support staff at Credit Suisse's investment banking operations in New York and London. Parts of Asia will be affected as well, according to a «Bloomberg» (behind paywall) report Wednesday citing people familiar with the matter. It's no secret that UBS wants massively scale back investment banking operations at its newly acquired business.
Sergio Ermotti Forges Ahead
After replacing Ralph Hamers as CEO, Sergio Ermotti revamped the ranks of senior executives placing UBS executives in all but one of the roles on the executive board, as finews.com reported, with Ulrich Koerner the only Credit Suisse representative. So far, Ermotti has reshuffled the top two tiers of management.
At a conference in Zurich yesterday, Ermotti said over the next 20 days, the third level of management will be announced, with up to 1,500 employees having their responsibilities clarified. He went on to say the integration of Credit Suisse was proceeding «very well», and that more clarity will follow at the end of the summer. UBS also delayed reporting its second-quarter financial results until August 31.
Safe for Now
The crown jewel of Credit Suisse, its business in Switzerland, is safe although a decision is expected in the third quarter. It is still open whether UBS will seek to integrate the unit, spin it off or take it public. Should the units merge, as many as 10,000 jobs would be cut, according to «Bloomberg», which makes that option a political hot potato. Still, Ermotti says retaining the unit is the «best-case scenario.»
Private bankers are seen as safe for the time being, with UBS hoping to retain the majority of those from Credit Suisse who have not yet left. In Asia, plans to keep «a few hundred» private bankers for a total of 1,200 in the region, according to the report.
Social Plans Aligned
For the time being, UBS will also need to keep those at Credit Suisse who manage structured loans to the wealthy and equity derivatives books.
Earlier this month, the social plans of the two banks were aligned in Switzerland, providing more advantageous transition periods, compensation, and other benefits. It doesn't apply in other countries, however, as finews.com reported.
