- UBS is set to begin slashing jobs at Credit Suisse.
- New York bankers and traders are among those most at risk of the chop.
Everyone knew that deep cuts would be coming at Credit Suisse, the bank that was taken over by local rival UBS in an emergency rescue one weekend in March. Yet the scale of the planned reductions are still eye-popping.
More than half of Credit Suisse's global workforce will be pruned beginning in July, Bloomberg reports, citing unidentified people familiar with the matter. That's more than 20,000 people. That's more than the headcounts of Blackstone, Jefferies, Lazard, and Moelis combined.
Credit Suisse bankers, traders, and support staff in New York will be among those bearing the brunt of the cuts, Bloomberg says, in addition to those in London and some Asian locations.
Credit Suisse insiders and outside recruiters told Insider in March that they expected employees of many investment banking divisions, including equity research analysts and traders, to get the ax.
"The investment banking business at Credit Suisse is in a lot of trouble," Oliver Rolfe, the founder of London-based recruiting firm Spartan International, said at the time. "There is so much overlap" between Credit Suisse and UBS.
The psychological impact of such deep cuts following a series of culls on Wall Street is significant.
Goldman Sachs has eliminated more than 3,000 jobs, Morgan Stanley is eliminating 3,000, and JPMorgan Chase and Citigroup have laid off hundreds. The retrenchment follows a drought in dealmaking and expectations of a broader economic slowdown in the US.
Adding to the anxiety for financial professionals is that many of the cuts on Wall Street have been coming in rounds since late last year. For UBS, July is only the first wave of reductions, with two more expected to come in September and October, Bloomberg says.
The goal, according to two of the people cited by Bloomberg, is to reduce the combined UBS-Credit Suisse work force by some 30% – or 35,000 people.
Credit Suisse had already been trimming its headcount before its troubles forced Swiss regulators to take action. Clients of the Swiss bank had pulled out $69 billion in the first quarter.
Swiss authorities had forced the shotgun marriage of the two banks to prevent a banking failure, yet the result will still see a loss of jobs in that country even as foreign finance centers take a bigger hit.
The silver lining? Most Credit Suisse's private bankers will be encouraged to stay, Bloomberg reports, although many have already left.