UBS Credit Suisse Merger Could Lead to 36,000 Job Cuts

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A recent report indicates that UBS’s takeover of Credit Suisse could result in 36,000 job cuts, making it one of the largest layoffs in Swiss banking history. The merger between the two banks was arranged by the Swiss government on March 19, in response to concerns about the potential for a global financial crisis.

Why the Merger?

The merger between the two banks was quickly arranged to prevent a global financial meltdown, following fears of contagion from the collapse of banks in the United States. UBS announced on Wednesday it would bring back former Chief Executive Sergio Ermotti to handle the huge risks involved in the Swiss banking giant’s controversial absorption of its troubled rival Credit Suisse.

Possible Job Cuts

As per a report by SonntagsZeitung published on April 2, around 36,000 jobs may be cut after UBS takes over Credit Suisse. Management is reportedly mulling cutting between 20 per cent and 30 per cent of the workforce, meaning between 25,000 and 36,000 jobs. Up to 11,000 jobs could be cut in Switzerland alone, according to the weekly, which did not provide details of which posts could be targeted.

UBS and Credit Suisse’s Workforce

Before the merger, UBS and Credit Suisse had employed slightly more than 72,000 and 50,000 people, respectively. As per the report, a merger of this scale could result in one of the largest layoffs in Swiss banking history.

Challenges of the Merger

UBS chairman Colm Kelleher said this week, “There’s a huge amount of risk in integrating these businesses.” Integrating Credit Suisse, a bank that has been embroiled in a series of scandals in the years leading up to a March 15 share price collapse, is a significant risk. Investor confidence plunged following two bank failures in the United States, which caused the collapse.

Scandals Associated with Credit Suisse

Credit Suisse has been involved in several scandals in recent years, including the bankruptcy of the British financial company Greensill and the implosion of the US hedge fund Archegos. It was also caught up in a bribery scandal in Mozambique involving loans to state-owned companies and was fined $2 million in a money laundering case linked to a Bulgarian cocaine network.

Conclusion

The UBS Credit Suisse merger, which was arranged to prevent a global financial crisis, may lead to significant job cuts in Switzerland and beyond. Management is reportedly considering cutting between 20 per cent and 30 per cent of the workforce, which could result in the largest layoffs in Swiss banking history. Additionally, the integration of Credit Suisse, a bank that has been embroiled in several scandals in recent years, is a significant risk for UBS.

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Micky Gene
I am a crypto expert, blockchain analyst. I am diving deep in digital world for finding the most promising projects, looking for a better future. Being from a Finance background, I efficiently write Price Analysis. Apart from writing, I am playing football.