After completing a successful emergency takeover of Credit Suisse earlier this month, UBS Group AG will be starting the first phase of a heavy workforce reduction in July.
The layoffs come after a $3 billion deal was reached in March for UBS to purchase the struggling Swiss investment bank. The agreement was brokered by Swiss regulators.
While news of the impending layoffs likely doesn't come as a surprise to anyone, UBS CEO Sergio Ermotti has been fairly quiet about which positions are set to be eliminated at the bank. Ermotti recently returned to the CEO position to oversee the smooth integration of the two banks - a process that could take several years.
According to a person familiar with the situation, half of Credit Suisse's workforce is set to be slashed and includes traders, bankers, and support staff from the London, New York, and Asia offices. The layoffs are expected to be conducted over 3 rounds with the first one kicking off in July and the last two coming between September and October.
The current Credit Suisse workforce has roughly 45,000 employees. UBS increased its workforce to approximately 120,000 after it merged with the struggling Swiss lender and now plans to reduce jobs in order to save $6 billion. UBS is expected to cut its workforce by 35,000 workers or 30 percent.
While UBS had hoped to keep many of Credit Suisse's private bankers, several have already left the institution. Meanwhile, the first round of layoffs is meant to reduce the "extensive overlap" that the two banks share in domestic operations.
Ermotti confirmed that the "base case scenario" for UBS is for the bank to keep Credit Suisse's domestic unit.
The anticipated massive layoffs at Credit Suisse are just the latest to hit the banking industry as job cuts have consistently increased since last year, possibly leading to the highest levels since the last financial crisis.
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