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UPS expects to lose about 3,000 jobs in Switzerland after a major overhaul to help it cut $10 billion in costs. Emergency rescue Credit Suisse earlier this year.
About 8% of the employees employed by the combined operations in Switzerland are job cuts A global banking giant And could spark new controversy in the country, where the deal has already proven unpopular with the public and some politicians.
“The Swiss Bank Employees’ Union demands that the 37,000 employees of the two companies in Switzerland be treated fairly and equally in the integration process,” the Swiss Bankers’ Association said in a statement on Thursday.
On a call with analysts, UBS CEO Sergio Ermotti said: “Every job lost hurts us. Unfortunately, under these circumstances, cuts are inevitable.
Ermotti said the job cuts would be spread over “two years” and that the bank would offer financial assistance, outsourced services and retraining opportunities to affected employees.
The bank has nearly 122,000 employees worldwide. It did not provide further details on the number of layoffs outside Switzerland in its earnings report – the first since it bought its rival.
About 8,000 Credit Suisse employees left voluntarily in the first half of the year, half in the Americas and Asia-Pacific and 10% in Switzerland, UBS CFO Todd Tughner told reporters.
Ermotti said the bank expects more employees to resign or retire, but jobs outside Switzerland will have to be cut to meet savings targets. UBS (UPS) also plans to reduce reliance on outside contractors.
“The bank faced the difficult challenge of trying to balance the need to retain key staff,” said Victoria Schaller, head of investments at online platform Interactive Investor.
Even UPS It confirmed plans to retain Credit Suisse’s banking operations in Switzerland and fully absorb them into the newly merged group, rather than opting for a spinoff or IPO. would have resulted in 400 fewer layoffs.
“Our analysis clearly shows that full integration is the best outcome for UBS, our shareholders and the Swiss economy,” Ermotti said in a statement. He added that it was “one of the largest and most complex banking mergers in history”.
UBS expects $10 billion in savings by the end of 2026, up from $10 billion in savings. A year earlier than planned when the acquisition was announced in March. Shares of the bank rose as much as 7% on the news on Thursday, and are up 35% so far this year.
UBS posted a net profit of $29 billion in the second quarter, reflecting a one-time boost from its takeover of Credit Suisse at a fraction of its value. But it benefited from strong inflows in its global wealth management business, posting $16 billion in net new money — the highest figure for a second quarter in more than a decade.
UBS agreed on March 19 to buy Credit Suisse for a bargain price of 3 billion Swiss francs ($3.4 billion) in a rescue operation planned by Swiss authorities. The collapse of the banking sector.
Controversy in Switzerland
Credit Suisse collapsed after confidence in the ailing lender collapsed and customers pulled their money. The company has been plagued by scandals and compliance failures in recent years, destroying its profits and losing customers.
But the death blow came after it admitted “material weakness” in its accounting and the demise of US regional lenders Silicon Valley Bank and Signature Bank fueled fears of weaker institutions.
The A combination of Two Swiss Banks have caused controversy Because it exposes Switzerland to a large financial institution with a 30% market share.
Taxpayers were initially concerned about potential losses from the deal, but UBS said earlier this month that it did not need a Swiss government guarantee of 9 billion francs ($10.3 billion) for future losses on Credit Suisse assets.
It said it no longer needed a 100 billion franc ($114.2 billion) government-backed loan and that Credit Suisse had repaid a 50 billion franc ($57.1 billion) loan owed to Switzerland’s central bank.
“Taxpayers will no longer bear any risks caused by these guarantees,” the Swiss government said at the time.
According to Ermotti, UBS and Credit Suisse will continue to operate under separate brands until at least the end of 2024. “Nothing will change for customers in the foreseeable future,” he said, adding that he would not rule out “selective” use of the Credit Suisse brand even after banks. attached.
