Credit Suisse and UBS Merger Could Cost 36,000 Jobs: Report
The merger between banks Credit Suisse and UBS could see up to 36,000 jobs being cut across the world, the SonntagsZeitung weekly reported on Sunday.
The takeover by UBS of Credit Suisse was hastily arranged by the Swiss government on March 19 to prevent a global financial meltdown, following fears of contagion from the collapse of banks in the United States. UBS announced on Wednesday it would bring back former Chief Executive Sergio Ermotti to handle the huge risks involved in the Swiss banking giant’s controversial absorption of its troubled rival Credit Suisse.
On Sunday, citing internal anonymous sources, SonntagsZeitung said management was mulling cutting between 20 percent and 30 percent of the workforce, meaning between 25,000 and 36,000 jobs.
Up to 11,000 jobs could be cut in Switzerland alone, according to the weekly, which did not provide details of which posts could be targeted.
Before the merger, UBS and Credit Suisse had employed slightly more than 72,000 and 50,000 people, respectively.
UBS and Credit Suisse, the second-biggest bank in Switzerland, were both among the select banks around the world considered to be global systemically important financial institutions (G-SIFIs) and therefore deemed too big to fail.
UBS chairman Colm Kelleher said this week: “There’s a huge amount of risk in integrating these businesses.”
Credit Suisse was embroiled in a series of scandals in the years leading up to a March 15 share price collapse, when investor confidence plunged following two bank failures in the United States.
Among these was the bankruptcy of the British financial company Greensill and the implosion of the US hedge fund Archegos.
It was also caught up in a bribery scandal in Mozambique involving loans to state-owned companies and was fined $2 million in a money laundering case linked to a Bulgarian cocaine network.