Will UBS-Credit Suisse Merger Witness Loss Of 36,000 Jobs Worldwide?

This could be one of the biggest news of the hour. As per the report by SonntagsZeitung weekly, the largest Sunday newspaper in Switzerland, the merger of UBS and Credit Suisse may lead to loss of about 36,000 jobs worldwide. 

It may be recalled that the merger between two of the largest banks of Switzerland was arranged by the Swiss government on 19 March this year after receiving concerns about the global financial crisis.

In order to manage the significant risks connected with the merger, UBS has announced its former CEO Sergio Ermotti will return. As per the anonymous sources quoted in the SonntagsZeitung article, management is considering eliminating from 25,000 to 36,000 jobs by reducing employee numbers by 20 per cent to 30 per cent. According to the analysis, up to 11,000 of these job losses might occur in Switzerland alone.

Prior to the merger, UBS and Credit Suisse employed little over 122,000 people collectively. As a result, both banks' personnel numbers would significantly decrease as a result of the anticipated job layoffs. The integration of these two companies entails considerable risks, according to UBS chairman Colm Kelleher.

Credit Suisse has been involved in a number of controversies over the past few years that have had a detrimental effect on investor confidence. Among the most well-known of these problems is the bank's involvement in the bankruptcy of the British financial firm Greensill and the demise of the US hedge fund Archegos. Also, the bank was fined $2 million in connection with a money laundering case involving a Bulgarian cocaine network and was connected to a bribery scandal in Mozambique.