Tens of thousands of bankers to be laid off

Tens of thousands of bankers to be laid off

Tens of thousands of employees could be made redundant as the world talks about the acquisition of Credit Suisse by UBS.

Tens of thousands of people are threatened with unemployment as Switzerland’s financial sector prepares to be hit hard by the controversial takeover. According to sources who spoke to the Financial Times, there will be several liquidations of Credit Suisse’s domestic business and its investment banking division, which employs a total of 30,000 people.

As part of the bailout package prepared by the Swiss government, UBS Group bought Credit Suisse, which has been in business for 167 years, for 3 billion Swiss francs and assumed the bank’s debt for 5.4 billion dollars.

Following the acquisition, UBS will liquidate most of Credit Suisse’s investment banking unit, according to the sources. UBS, which has 74,000 employees worldwide, has put on its agenda eliminating overlapping roles with Credit Suisse in Switzerland, closing branches and cutting staff in administrative positions.

THE LAUNCHES HAVE BEGUN

Tens of thousands of people are expected to be affected by the liquidations that will occur in the services and units where the two banks overlap. With just over 50,000 employees at the end of 2022, Credit Suisse has laid off 4,000 employees so far this year.

“The takeover poses a threat of redundancies on a scale that the job market in the banking sector cannot handle,” the Swiss Bank Employees Association said in a statement yesterday, calling for the redundancies to be halted by the end of the year. The association urged Credit Suisse’s management team to form a task force to manage the risk of mass layoffs.

THE COST WILL BE REDUCED

After the deal was announced, UBS CEO Ralph Hamers said in a meeting with analysts Sunday night that he would seek $8 billion a year in cost reductions by 2027. Hamers stated that $6 billion of these cuts will come from staff reductions and $2 billion will be from information technology spending.

In a note to a staff member Monday, Credit Suisse CEO Ulrich Körner said no decision has yet been made regarding the employees. “We will work diligently and quickly over the next term to determine which roles may be affected. “Where necessary, we will communicate with affected individuals in accordance with country-specific guidelines and policies.”

STOPPED PREMIUM PAYMENTS

On the other hand, the Swiss government took a step that punished bankers by stopping Credit Suisse’s bonus payments to employees.

The Swiss government said yesterday in a statement that Credit Suisse has decided to suspend “variable salaries, which it will give to its employees later,” for the period until 2022. These variable salaries consist of bonuses such as shares distributed to employees.

The government also stated that it will not stop paying premiums that have been paid this year or are due soon, and that this is only intended to protect employees who did not cause the crisis.

It is quite unusual for the government to withhold bond payments, but the government’s guarantee of around 260 billion francs to save the bank has provoked a strong public reaction.

Credit Suisse, in its last published annual report before being sold to UBS, said it had cut its bonus budget by 50 percent to 1 billion francs by 2022. Swiss unions demanded yesterday that no bonuses be given to managers from the bank.

Source: Sozcu

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