Key events
Introduction: Jobs at risk after UBS takeover of Credit Suisse
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
As the dust settles following the emergency rescue of Credit Suisse by UBS, fears of heavy job losses are growing.
The shotgun wedding hammered out between the two Swiss banks last weekend will create a 120,000-strong financial institution – and it already seems inevitable that the workforce will shrink.
Switzerland’s financial sector already anticipating a heavy hit from the contentious takeover, with the Swiss Bank Employees Association warning yesterday that “the jobs of very many employees are at stake.”
Credit Suisse’s domestic business and its investment bank, which collectively employ more than 30,000 staff, are expected to bear the brunt of the cuts, the Financial Times reports this morning.
According to people familiar with UBS’s plans, as much as a third of the 120,000 jobs in the combined group could be at risk, as UBS winds down much of the investment bank and removes overlapping roles in Switzerland.
The FT explains:
Credit Suisse, which at the end of 2022 employed just over 50,000 people, was already in the middle of a wide-ranging job-cutting drive, with 4,000 positions slashed so far this year.
But the takeover is expected to result in many of Credit Suisse’s 17,000 investment bankers losing their jobs as UBS winds down most of the unit.
On Sunday night, UBS chairman Colm Kelleher explained that he plans to run down the investment banking part of Credit Suisse. UBS itself operates an investment bank-lite model, more focused on asset management which is less risky.
Kelleher (who apparently squeezed in a beer at Zurich’s James Joyce pub during the weekend negotiations to rescue Credit Suisse), told reporters on Sunday evening that it was “just too early to say” what would happen about job cuts, adding:
“We will be considerate employers, but we need to do this in a rational way, thoughtfully, and when we’ve sat down and analysed what we need to do.”
The former chief executive of UBS in the UK, Mark Yallop, said he thinks job losses will be “inevitable”. He told Radio 4’s Today programme on Monday they will probably be concentrated in Credit Suisses’ investment banking business, and in in middle-office, technology and operational roles.
Some Credit Suisse bankers aren’t planning to hang around and see the axe fall, though.
Headhunters and rival lenders from Singapore to London to New York have been fielding calls over the past few days from anxious Credit Suisse staff, Bloomberg say, adding:
One firm in Singapore handled questions from some 30 mostly Credit Suisse private bankers about available jobs on Monday, while another recruiter in Hong Kong has been talking to more than 20 senior investment bankers since last week, the people said, asking not to be identified discussing confidential information.
Meanwhile, a firm that’s focused on managing director hires said it has received such calls since late Friday, especially for the wealth area.
Financial markets appear calmer today, after a volatile session on Monday. Europe’s main stock market indexes are expected to rise this morning.
Investors were initially panicked yesterday that some Credit Suisse bond holders were being wiped out while shareholders would receive a payment, inverting the usual order of business.
But UK and European officials calmed the markets, by insisting they would stick to the usual heirachy.
The agenda
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7am GMT: UK public finances for February
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9.45am GMT: Treasury Committee gathers economist views on Spring Budget
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10am GMT: ZEW index of German economic sentiment
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2pm GMT: US existing home sales
