Although it’s too soon to estimate how many jobs would be lost, Colm Kelleher, UBS Chairman said 9000 figure will be large. The company confirmed in a press release on Sunday that it aims to reduce the annual cost base of the merged company by much more than $8 billion by 2027. The costs for Credit Suisse last year came to about half of that.
Even before the government-brokered acquisition of Credit Suisse Group AG, the Swiss institution was attempting to save itself by axing 9,000 jobs. Once rival UBS Group AG accepted the purchase of the struggling bank, that is just the beginning, as to people who are familiar with the negotiations; one person said the total cost may be multiples of that amount.
Immense Layoffs Expected Soon
Significant overlaps result from the combination. Almost 125,000 individuals were employed by the two institutions as a whole by the end of the previous year, with Switzerland accounting for nearly 30% of the total.
Notwithstanding worries about industry concentration from this transaction, according to Kelleher, the company was committed to keeping Credit Suisse’s successful Swiss division. However, it was evident from his comments that UBS is more enthusiastic about Credit Suisse’s financial advisory division than its investment bank. The investment company will be diminishing, which will probably put a stop to hopes for a CS First Boston spinoff.
The UBS chairman acknowledged that the workforce at Credit Suisse will face “tough” times in the following months and said that UBS would do everything in its power to minimize the uncertainty.
The transaction runs the risk of clients who already have funds with both companies moving some of it to a rival to reduce their vulnerability to any one company, which is common in Asia, in which the two companies are among the biggest investment firms. Ulrich Koerner, the CEO of Credit Suisse, revealed on Tuesday that he has already eliminated around 8% of the company’s workforce.