Credit Suisse axes 300 jobs in Zurich

The bank's Zurich operations are being trimmed Keystone

Cash-strapped Credit Suisse group is to cut 300 jobs at its Zurich base in a move that is expected to save SFr140 million ($98 million).

The loss-making bank said the cuts would be achieved by merging some investment banking activities with its financial services division.

CS said Zurich-based securities and treasury operations at its investment bank, Credit Suisse First Boston (CSFB), would be moved into its Financial Services division, and the job cuts would be spread across both.

Some job cuts had been expected in Zurich – markets have been speculating since Wednesday that the bank would try to cut down the overlap between the two divisions.

The change, expected to be in place by mid-2003, is part of ongoing moves by joint chief executives, John Mack and Oswald Grübel, to cut costs and restore profitability.

Thursday’s move means securities and treasury transactions for CS’s private banking clients will be handled by the Financial Services division, and no longer by CSFB.

The investment bank will continue to deliver securities and treasury products to institutional, corporate and government clients in Switzerland, but these tranactions will be handled through its London branch.

Exposed

Under the outgoing CEO, Lukas Mühlemann, CS embarked on an ambitious expansion strategy in insurance and investment banking that left the group heavily exposed when global stockmarkets tumbled.

Mack and Grübel are now trying to trim costs and restore earnings power after CS reported a record SFr2.1 billion loss for the third quarter, largely on the back of losses at CSFB and CS’s insurance subsidiary, Winterthur.

The group’s shares are the among Europe’s worst performers this year, having lost over half their value.

CS declined to say whether more job cuts were in the pipeline, but correspondents say that unless the markets improve, the bank will have difficulty meeting its own target of returning to profitability in 2003 without more cuts.

Mack has already axed 6,000 jobs at CSFB since taking over as chief in July 2001. The group employs some 80,000 people, around 25,000 of whom are based in Switzerland.

swissinfo with agencies

CS facts

The cuts will be spread evenly cross CSFB and CS’s Financial Services division.
The move means securities and treasury transactions for CS’s private banking clients will no longer be handled by CSFB.
The cuts are part of an ongoing effort to restore profitability.
CS’s problems stem from an ambitious expansion strategy that left the group heavily exposed when global stockmarkets tumbled.