UBS Group’s emergency bailout of struggling lender Credit Suisse could reportedly result in “tens of thousands” of layoffs – and worried bankers are already said to be scrambling to contact recruiters.
The culling is expected to hit hardest at Credit Suisse’s operations in Switzerland and its investment bank, the Financial Times reported, citing sources familiar with UBS’s plans for the firm.
The report said the amount of lost jobs could be “as much as a third” of the 120,000 people employed at the combined operations of Credit Suisse and UBS.
“The takeover threatens job cuts on a scale that the labor market in the banking sector cannot absorb,” the Swiss Bank Employees’ Association said in a Tuesday statement, according to the outlet.
Credit Suisse CEO Ulrich Korner and chair Alex Lehmann told staffers that no decision have yet been made about potential layoffs.
Separately, a source told Bloomberg that the layoffs could amount to “multiples” of Credit Suisse’s current plan to slash 9,000 jobs, which was already in place before UBS took over the troubled lender.
Rumored layoffs have prompted an “unprecedented flood” of calls from Credit Suisse bankers to corporate headhunters and other firms as they look to secure new gigs ahead of the upheaval, Bloomberg reported, citing interviews with people at more than a dozen firms based in New York, London, Singapore and other cities.
One firm in Singapore told Bloomberg they had received calls from approximately 30 private bankers, mostly employed by Credit Suisse, on Monday alone — one after the UBS deal was announced.
A recruiter based in Hong Kong said they had fielded calls from more than 20 senior investment bankers over the last week, while another headquartered in London said inquiries were coming in “all weekend.”
“The best ones at Credit Suisse have probably already left,” Singapore-based recruiter Will Tan of Principal Partners told the outlet.
“There’s definitely not enough to go around for everyone,” Tan added.
Any ousted workers could face a difficult path to finding another job, given the current turmoil in the US banking system and abroad. Some banks, such as Goldman Sachs, have already conducted layoffs within the last few months.
Shares of Credit Suisse has cratered since last week, when top brass disclosed that they had discovered “material weaknesses” in the firm’s financial reporting over the last two years.
UBS’s government-brokered emergency rescue did little to assuage concerns, as Credit Suisse’s stock cratered by some 55% in the first day of trading after the announcement. UBS shares pared early losses and ended 1.2% higher on Monday.
The admission prompted a crisis of confidence among investors and raised fears of a collapse that could spread further contagion in a banking sector already rocked by the implosions of Silicon Valley Bank and Signature Bank of New York.
“We are encouraging colleagues to continue to the best of their abilities against a difficult backdrop,” a Singapore-based Credit Suisse spokesperson told Bloomberg.
“Ultimately, we will do everything we can to ensure an orderly transition and to serve our clients as best as possible,” the spokesperson added.
UBS reportedly referred to its Sunday statement on the deal when asked for comment about the job situation.
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” UBS Chairman Colm Kelleher said in the statement.
“We have structured a transaction which will preserve the value left in the business while limiting our downside exposure,” Kelleher added.
Credit Suisse declined to comment when reached by The Post.
UBS did not immediately respond.