The merger was quickly arranged by the Swiss government on March 19, in response to concerns about the potential for a global financial crisis
The merger between two of Switzerland’s largest banks, UBS and Credit Suisse, could lead to the loss of up to 36,000 jobs worldwide, according to a report by SonntagsZeitung weekly, the largest Sunday newspaper in Switzerland.
The merger was quickly arranged by the Swiss government on March 19, in response to concerns about the potential for a global financial crisis. This move was deemed necessary after the collapse of several banks in the United States raised fears of contagion.
UBS has announced that former CEO, Sergio Ermotti, will return to manage the large risks associated with the merger. The anonymous sources cited in the SonntagsZeitung report suggest that management is considering cutting between 20 per cent and 30 per cent of the workforce, which could result in a loss of between 25,000 and 36,000 jobs. The report suggests that as many as 11,000 of these job cuts could take place in Switzerland alone.
Before the merger, UBS and Credit Suisse had a combined workforce of slightly over 122,000 employees. As a result, the proposed job cuts would represent a significant reduction in staff numbers for both banks. UBS chairman Colm Kelleher has acknowledged that there are significant risks associated with integrating these two businesses.
Over the past few years, Credit Suisse has been embroiled in a series of scandals that have negatively impacted investor confidence. The bank’s involvement in the bankruptcy of British financial firm Greensill and the collapse of US hedge fund Archegos are among the most high-profile of these controversies. Additionally, the bank has been implicated in a bribery scandal in Mozambique and has been fined $2 million in relation to a money laundering case involving a Bulgarian cocaine network.
