UBS Plans to Cut Over Half of Credit Suisse Workforce

While UBS had originally planned to keep the top 20% of dealmakers, in particular those focusing on technology, media and telecoms, many of the top performing bankers have already departed or been poached by competitors, people said.

Deutsche Bank AG, Jefferies Financial Group Inc. and Wells Fargo & Co. are among competitors who have snapped up Credit Suisse staff in recent months.

UBS is hoping to retain the majority of Credit Suisse’s private bankers, though many have already left, two of the people said.

In Asia Pacific, UBS is planning to keep a few hundred Credit Suisse private bankers, bringing its total to more than 1,200, people familiar told Bloomberg earlier this month. Some private bankers in Singapore are set to relocate to UBS’s flagship offices near a prime shopping district in the city-state as soon as next month in one of the first concrete signs of the merger taking shape.

The bank will also need to retain, at least in the near term, the people responsible for managing Credit Suisse’s structured loans to wealthy clients and the equity derivatives books, one of the people said.

Swiss Situation

With respect to the Swiss domestic business, UBS plans to make a decision in the third quarter on whether it will fully integrate it with its own Swiss unit or seek another option such as spinning it off or listing it publicly.

The fate of the Swiss bank has been widely watched as Swiss-based companies and politicians have voiced concerns over the market power that the combined bank would exercise.

As such, the initial rounds of job reductions will likely exclude those related to the extensive overlap in the Swiss businesses, the people said. Overall, as many as 10,000 jobs would be eliminated if the two domestic businesses are merged, one person said.

About 30% of the the megabank’s combined staff is in Switzerland but it is spread across the domestic businesses as well as employees who are based in the country but work for corporate functions or in wealth and asset management.

Ermotti has said that the “base case scenario” is for UBS to retain Credit Suisse’s domestic unit. Many employees, based on comments from Ermotti and Chairman Colm Kelleher in meetings and townhalls this month, expect the businesses to be fully merged, especially after the deterioration of the private banking arm of Credit Suisse’s domestic business, the people said.

–With assistance from Ambereen Choudhury, Steven Arons, Cathy Chan, Crystal Tse, Katherine Griffiths and Bastian Benrath.

(Images: Bloomberg)