Credit Suisse is considering slashing one in every 10 positions, about 5,000 jobs in total. Here’s more on the cost reduction drive at the second-biggest bank in Switzerland.
Credit Suisse to cut 5,000 jobs
As per sources, Switzerland’s second-biggest bank, Credit Suisse is undergoing a major cost reduction drive. The scale of the potential job reduction underlines the new challenge facing the bank and Ulrich Koerner, its new chief executive. Koerner is seeking to put the organization back on an even following a string of scandals. However, the bank declined to comment and stated it will be updating its strategy with its earnings for the third quarter.
As per Credit Suisse, 2022 is a “transition” year for the bank with a change of guard and a move of curtailing risk-taking in investment banking. However, the Zurich-based bank dismissed speculation of being bought or breaking up. However, sources reveal discussions on job cuts are ongoing. While the number of job cuts can change, Blick, a Swizz newspaper revealed over 3,000 jobs may be lost.
More on the bank’s new move
According to Credit Suisse, it is going to cut costs below $15.8 billion in the midterms instead of an annualized $17.2 billion for the year. Koerner was promoted to CEO about a month ago and is tasked with pairing back investment banking. This is in addition to cutting costs of over $1 billion to help the bank recover from setbacks and scandals. He will also be evaluating their options and reaffirming commitments to serve wealthy customers.
“Cutting cost is the easiest immediate step it can take. But it’s not a strategy. You can end up in a vicious circle, where jobs are cut, service declines, and customers leave,” stated Andreas Venditti. Venditti is an analyst with Vontobel. “Should restructuring costs, including from job cuts, run into the billions, the bank may also need to raise more capital,” he added. In June, Credit Suisse was convicted of failing to prevent money laundering.
