UBS to Eliminate 3,000 Positions in Switzerland Amid Credit Suisse Integration
UBS is set to reduce its workforce in Switzerland by around 3,000 jobs, forming a part of its strategy to achieve $10 billion in savings through a comprehensive restructuring of the global banking conglomerate. This transformation stems from UBS's emergency rescue of Credit Suisse earlier this year.
The proposed job cuts constitute roughly 8% of the total workforce employed across both banks' Swiss operations. This move could potentially lead to fresh controversies within the nation, as the merger has already garnered public disapproval and raised concerns among certain political circles.
The Swiss banking union expressed its stance, emphasizing equitable treatment for the combined 37,000 employees of both institutions during the integration process. UBS CEO Sergio Ermotti addressed the issue during an analyst call, stating, "Every lost job is painful for us. Unfortunately, in this situation, cuts were unavoidable."
Ermotti clarified that the workforce reductions would be implemented "over a couple of years." The bank intends to offer impacted employees financial assistance, outplacement services, and opportunities for retraining.
While UBS, with a global workforce of nearly 122,000, did not divulge specific details about potential layoffs outside Switzerland in its second-quarter earnings statement, it confirmed its decision to fully integrate Credit Suisse's banking operations within the newly amalgamated entity. This approach was chosen over alternatives such as a spin-off or IPO, even though it may lead to a higher number of redundancies.
Ermotti stated, "Our analysis clearly shows that a full integration is the best outcome for UBS, our stakeholders, and the Swiss economy." He acknowledged the complexity of this venture, deeming it "one of the biggest and most complex bank mergers in history."
UBS foresees generating over $10 billion in savings through integration by the end of 2026 – a figure that surpasses initial estimates by $1 billion and is projected a year ahead of schedule. The announcement had a positive impact on UBS's stock, resulting in share price gains of up to 7%.
In a deal orchestrated by Swiss authorities to avert a potential banking sector crisis, UBS agreed on March 19 to acquire Credit Suisse at a discounted price of 3 billion Swiss francs ($3.4 billion).