UBS Group AG will slash its workforce by between 20% and 30% after completing its takeover of rival Credit Suisse, letting go as many as 36,000 employees globally, the newspaper Sonntagszeitung has reported, citing a senior manager at UBS.
The newspaper highlighted that some 11,000 employees would be dismissed in Switzerland, although it did not provide any details about which positions would be targeted. The two lenders together employed almost 125,000 people worldwide at the end of 2022, about 30% of which were in Switzerland, according to the report.
Last month, the two Swiss banks announced a historic merger, with UBS agreeing to pay 3 billion Swiss francs ($3.24 billion) in stock to acquire its embattled rival in a deal underpinned by government guarantees and 100 billion francs (just over $1 billion) in liquidity assistance from Switzerland’s central bank. The government-brokered deal was aimed at shoring up public confidence in the Western financial system and averting a global crisis after the collapses of two regional banks in the US.
The banking crisis exacerbated the troubles of Credit Suisse, which had been already battling a string of scandals, legal issues, and customer outflows. On top of that, its biggest investor, Saudi National Bank, announced in March it would not be able to provide financial assistance due to regulatory and statutory limits. Credit Suisse reported a 2022 net loss of 7.3 billion francs (nearly $8 billion) and warned that it would incur another “substantial” loss in 2023 before returning to profitability in 2024.
The merger of Switzerland’s two biggest banks is scheduled to be completed by the end of this year. Last week, UBS announced that “in light of the new challenges and priorities facing UBS after the announcement of the acquisition” it is bringing back former CEO Sergio Ermotti. A UBS statement pointed to how Ermotti, who ran UBS for nine years from November 2011 to October 2020, had “successfully repositioned” the bank following the 2008 global financial crisis and “achieved a profound culture change within the bank.”
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