UBS outlines jobs cull from Credit Suisse takeover

By the time Credit Suisse has been fully consumed by UBS, the combined entity will have thousands fewer staff. Keystone / Steffen Schmidt

By 2026 the Credit Suisse brand will become extinct while the Swiss banking industry will employ 11,000 fewer people than at the end of last year.

UBS, which is in the process of taking over Credit Suisse, has outlined some of the painful measures in store as it seeks to make $10 billion (CHF8.8 billion) in savings. Job cuts already began some months ago when Credit Suisse tried to put its own crumbling house in order.

Last October, Switzerland’s second largest bank announced a major restructuring plan that would result in 9,000 jobs being lost. But it was too little, too late – resulting in the emergency sale of Credit Suisse to UBS in March.

“It was not just a matter of liquidity drying up. Credit Suisse’s business model and business mix was deeply flawed and its reputation severely damaged,” UBS CEO Sergio Ermotti said on Thursday. “With its structural lack of underlying profitability, unsustainable capital allocation and negative revenue and cost prospects, the bank was no longer in a position to continue on its own.”

In the first six months of this year, Credit Suisse let 8,000 staff go. From next year 2,000 more will also begin to exit, while a further 1,000 duplicated posts will be erased between the two banks by the time the merger is complete at the end of 2026.

Both banks employed more than 122,000 people worldwide at the end of 2022. By the time of the buyout in March, some 35,000 people worked for UBS and Credit Suisse within Switzerland.

The precise impact of the job cuts in the domestic Swiss banking sector are still not clear. Around 10% of the 8,000 staff axed by Credit Suisse so far this year were employed in Switzerland, UBS told the media on Thursday.

Around half of the posts were lost in the United States, which hosts Credit Suisse’s troublesome investment banking operations, or in Asia.

“Behind every layoff are people and families,” the Swiss government stated. But ministers are confident that the process is being handled sensitively with proper support for affected staff.

Financial sector impact

And because the job cuts are being staggered between last autumn and the end of 2026, the State Secretariat for Economic Affairs, believes the job market will absorb the losses.

“Historically, people coming out of UBS and Credit Suisse have had a high degree of success at finding a new job within a year,” added UBS CEO Ermotti.

UBS also plans to cut down on its use of outside contractors. For example, the bank has a goal of raising the proportion of IT functions performed in-house, from 60-65% at present to 80-85% in the coming years.

Trade unions are pleased that UBS has delayed the next round lay-offs until next year and have proclaimed themselves satisfied with the framework measures designed to soften the blow for departing staff.

The Swiss Bank Employees’ Association has demanded equal treatment between staff of both banks.

Economic output by the Swiss financial centre (banks, insurance, asset management and other branches) accounts for around 8.9% (CHF69 billion, $78.5 billion) of total gross domestic product, according to the State Secretariat for International Finance. The sector’s economic impact is down from 12.3% of GDP in 2007.

Some 5.8% of all Swiss employees worked in finance in 2012, a proportion that had diminished to 5.2% ten years later.

Zurich, the largest single financial centre domestically, contributes over CHF30 billion and more than 97,000 full-time jobs to the local economy.