UBS Strategizes Reducing Workforce: 35,000 Credit Suisse Staff Members Face Layoffs

**UBS Group to Cut Over Half of Credit Suisse Group’s Workforce in Emergency Takeover**

UBS Group is preparing to reduce more than half of Credit Suisse Group’s workforce following the bank’s emergency takeover. The majority of the cuts are expected to impact bankers, traders, and support staff in Credit Suisse’s investment bank in London, New York, and parts of Asia. Staff have been informed of three rounds of cuts scheduled for this year, with the first expected by the end of July and two more tentatively planned for September and October. UBS aims to save $6 billion in staff costs over the coming years.

**UBS’s Ambitious Workforce Reduction Plans**

UBS intends to reduce the total combined headcount by about 35,000 people or approximately 30%. This reduction in staff aligns with the analysis provided by Redburn, which estimated an overall reduction of around 30,000. Credit Suisse’s current headcount stands at approximately 45,000. The job exits and downsizing plans have not been officially commented on by UBS.

**Implications for the Financial Sector**

The reduction in staff at Credit Suisse will further exacerbate an already challenging year for financial sector jobs worldwide. Major Wall Street investment banks like Morgan Stanley and Goldman Sachs have also announced significant cuts to their workforce. The acquisition of Credit Suisse by UBS has resulted in a notable shift in executive ranks, with UBS executives dominating the combined firm’s leadership positions.

**UBS’s Strategy to Address Losses and Mitigate Risks**

UBS signaled early on in the takeover that it would aggressively downsize Credit Suisse’s loss-making investment bank. The Archegos Capital Management scandal in 2021, which led to a $5.5 billion loss, underscored the need for significant changes. While UBS initially planned to retain the top 20% of dealmakers, including those specializing in technology, media, and telecoms, many high-performing bankers have already left or been recruited by competitors such as Deutsche Bank, Jefferies Financial Group, and Wells Fargo.

**Focus on Retaining Credit Suisse’s Private Bankers**

UBS is eager to retain the majority of Credit Suisse’s private bankers, though many have already departed. The bank plans to maintain a few hundred Credit Suisse private bankers in Asia Pacific, bringing the total to more than 1,200. This effort showcases UBS’s commitment to the merger and integration. Some private bankers in Singapore are expected to relocate to UBS’s flagship offices near a prime shopping district as an early indication of the merger’s progress.

**Considerations for Swiss Domestic Business and Future Integration**

The fate of Credit Suisse’s Swiss domestic business remains uncertain. UBS will make a decision in the third quarter on whether to fully integrate it with its own Swiss unit, explore other options such as spinning it off, or list it publicly. Concerns over the market power held by the combined bank have been raised by Swiss companies and politicians. Initially, the job reductions will likely exclude roles tied to the overlap in the Swiss businesses. However, merging the domestic businesses could potentially lead to the elimination of up to 10,000 jobs. UBS CEO Sergio Ermotti has expressed a preference to retain Credit Suisse’s domestic unit.

In conclusion, UBS Group’s takeover of Credit Suisse Group will result in a significant reduction of staff. UBS aims to streamline operations and mitigate losses, primarily by downsizing Credit Suisse’s investment bank. The acquisition has already led to a shift in executive ranks within the combined firm. Retaining Credit Suisse’s private bankers in Asia Pacific is a priority for UBS. The fate of Credit Suisse’s Swiss domestic business remains uncertain, and a decision will be made in the third quarter. The merger between UBS and Credit Suisse has substantial implications for the financial sector and job market worldwide.

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