UBS-Credit Suisse merger to result in massive layoffs

By Al Mayadeen English
Source: Agencies
2 Apr 2023 13:22
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Up 36,000 jobs may be compromised as a result of this historical merger.

In this Sept. 15, 2011 file picture the logo for Swiss bank UBS is photographed outside one of their offices in the City of London. (AP)

Swiss news agency SonntagsZeitung weekly reported on Sunday that the UBS takeover of Credit Suisse could result in layoffs of up to 30 percent of the total workforce across the world, amounting to approximately 36,000 positions.

This comes after UBS announced the rushed acquisition of Credit Suisse, which was arranged under the auspices of Swiss authorities on March 19.

Credit Suisse, Switzerland's second-largest bank, collapsed in March 2023 following years of facilitating tax evasion for America's wealthiest.

It was also caught in a bribery scandal and a money laundering case linked to a Bulgarian cocaine network.

Credit Suisse has paid over $11 billion in penalties since 2000.

- Criminally convicted of allowing drug dealers to launder money in Bulgaria
- Defrauded investors in a Mozambique corruption case
- Spying scandal
- Massive leak of client data to the media pic.twitter.com/VbPHxx6Ilv
— Genevieve Roch-Decter, CFA (@GRDecter) March 16, 2023

The merger was also a means of preventing financial contagion from the US where three major lenders recently declared bankruptcy.

Switzerland's largest bank UBS announced on Wednesday that it would re-assign former chief executive Sergio Ermotti to lead the company through the "huge amount of risk" entailing the Credit Suisse merger.

SonntagsZeitung reported on Sunday, citing sources that requested anonymity, that the management was considering layoffs between 20 and 30 percent, or 25,000 to 36,000 jobs.

Up to 11,000 jobs could be cut in Switzerland alone, the source added, without disclosing further details as to which kinds of posts may be affected.

Prior to the acquisition, UBS and Credit Suisse employed a little over 72,000 and 50,000 workers respectively.

They were both identified as some of the world's global systemically important financial institutions (G-SIFIs) - therefore deemed too big to fail.

UBS chairman Colm Kelleher called it "the biggest single financial transaction" since the 2008 financial crisis, noting that the merger is "bigger than any deal that was done in 2008 because it's the first time two G-SIFIs have merged. That brings with it significant execution risk."