Credit Suisse Braces for Massive Job Cuts as UBS Takeover Fallout Continues

Following its emergency takeover by local rival UBS in March, the bank has announced plans to slash over half of its global staff, marking a staggering scale of job cuts.

According to Bloomberg, more than 20,000 employees will be affected by the pruning, surpassing the combined headcounts of major firms such as Blackstone, Jefferies, Lazard, and Moelis. The impact will be felt particularly hard by Credit Suisse bankers, traders, and support staff in New York, along with personnel in London and select Asian locations.

Insiders and recruiters familiar with the matter had already anticipated the grim outlook back in March, predicting that various investment banking divisions, including equity research analysts and traders, would bear the brunt of the cuts. Oliver Rolfe, founder of London-based recruiting firm Spartan International, highlighted the challenges faced by Credit Suisse’s investment banking business, emphasizing the significant overlap with UBS.

This wave of deep job cuts adds to the mounting psychological toll within the financial industry, which has already witnessed substantial layoffs in recent times. Goldman Sachs has eliminated over 3,000 positions, while Morgan Stanley and JPMorgan Chase have followed suit with 3,000 and several hundred layoffs, respectively. These retrenchments reflect a combination of decreased deal activity and concerns about an impending economic slowdown in the United States.

The anxiety among financial professionals is further compounded by the iterative nature of job cuts on Wall Street, with reductions taking place in successive rounds since late last year. For UBS, the upcoming cuts in July only mark the initial wave, with two additional waves expected in September and October, as reported by Bloomberg.

The overarching objective, as outlined by insiders cited by Bloomberg, is to reduce the combined UBS-Credit Suisse workforce by approximately 30%, which equates to around 35,000 employees.

Credit Suisse had already commenced trimming its headcount prior to the challenging circumstances that prompted Swiss regulators to intervene. Notably, clients withdrew a significant $69 billion from the bank in the first quarter alone.

The forced shotgun marriage of Credit Suisse and UBS by Swiss authorities aimed to avert a banking failure. However, the fallout will still result in job losses within the country, even as foreign financial centers face their share of the impact.

Amidst the gloomy outlook, there is a silver lining for most of Credit Suisse’s private bankers. Bloomberg reports that they will be encouraged to remain with the bank, although many have already departed.