Credit Suisse recently became the third big bank to fall after Silicon Valley Bank and Signature Bank. Switzerland¡¯s biggest bank UBS has come to the rescue by coming forward to acquire its rival Credit Suisse for around $3 billion.
While the back-to-back failures of global banks have deepened fears regarding which bank is next in line, the future of employees of Credit Suisse's India-based technology back offices, too, is in jeopardy.?
Credit Suisse¡¯s India offices will likely see the maximum impact of the mega bailout in Swiss banking as rationalisation of roles and focus on costs after the UBS takeover of its stressed rival cause job losses at the multi-city facilities known locally as global in-house centres (GIC).
Credit Suisse employs about 14,000 people across three Indian cities.?After the merger, role rationalisation is likely to lead to many job losses in these areas as UBS will seek to retain only the best talent at Credit Suisse, as per ET.
UBS?and Credit Suisse have offices across?Mumbai, Pune, Gurgaon and Hyderabad.??
Following the news that Credit Suisse Group would be sold to UBS Group AG for $3.3 billion, the collapsed bank issued two internal memos to staff ¡ª a Q&A addressing subjects including job security, pay, bonuses and pensions ¡ª and a memo to staff signed by Chairman Axel Lehmann and CEO Ulrich K?rner, as per Bloomberg report.
Here are both the internal memos, in full:
Colleague Q&A
1. Why is this happening?
In recent days there has been increased turmoil in the financial markets and growing concern about risks to financial stability. Despite being a well-capitalized and solvent systemically important global institution, Credit Suisse faced a situation of falling confidence from clients and institutions. In discussions with the Swiss government and regulators, the Board of Credit Suisse has decided that the interests of our stakeholders are best served through a merger with UBS.
2. Should staff come into the office?
Yes. Your role is not immediately impacted. We must all continue to work as normal. It remains critically important that you continue to come to the office or work according to your agreed work pattern.
3. Do I still have a job?
Yes. There is no immediate change to your role.
4. What does this mean for my job security?
Today's announcement indicates the agreement to merge Credit Suisse and UBS and is subject to necessary approvals. We expect the merger is expected to close by the end of 2023 and until such time we will continue to operate as close as possible to ¡°business as usual,¡± focused on serving our clients.
As we build the plans to integrate our business, we will communicate regularly to ensure you are aware of progress and any changes that may impact you. We want to reassure you that we are fully committed to managing this process with transparency and openness, to treating everyone with fairness and respect and to ensure that you are kept up to date as decisions are made to minimize uncertainty and disruption.
If there are changes to your role, we will inform you. If redundancies prove necessary, we will communicate in line with prevailing country-specific guidelines and practices and with our applicable social partners.
5. When will I know if I still have a job?
We work diligently and at pace throughout the coming period to identify which roles might be impacted. Where necessary, we will communicate with impacted individuals in line with country specific guidelines and policies.
6. If I no longer have a job, will I receive a severance package?
We will aim to continue to provide severance in line with market practice and in discussion with our social partners.
We want to reassure you that we are fully committed to managing this process with transparency and openness, to treating everyone with fairness and respect and to ensure that you are kept up to date as decisions are made to minimize uncertainty and disruption.
Both companies have a history of treating employees who are impacted by a reduction in force with fairness and of providing severance that is consistent with the practices in the markets in which we operate.
7. Will my salary and any bonus still get paid on March 24?
Yes. There are no changes to payroll arrangements.
We will pay salary and bonus, where outstanding, as per the previously communicated schedule. In many countries, the bonus has already been paid out and we do not expect any changes for the remaining jurisdictions.
8. What will happen to colleague exit programs / RIFs already underway?
We want to reassure you that we are fully committed to managing this process with transparency and openness, to treating everyone with fairness and respect and to ensure that you are kept up to date as decisions are made to minimize uncertainty and disruption.
9. I understand the need for client facing roles, but what will happen to the corporate functions?
Corporate functions are an integral part of delivering the infrastructure and services for client facing roles, as well as delivering key control functions to ensure risk is managed appropriately. We will work closely with UBS throughout the integration to identify the best approach to continuing to provide this support. We do not anticipate any materials (sic) changes until the transaction has closed.
10. When will the transaction close?
The transaction is subject to regulatory approvals, and we expect it to be completed by the end of 2023. We will keep you informed of the timeline for this and regular updates whenever we can. In the meantime, it is important that we all move forward with our daily business and operations on behalf of our clients.
11. I am a contract worker with Credit Suisse. Will you honour my contract to its end-date?
Until the pending merger receives all of the necessary approvals and is closed, our work should be ¡°business as usual.¡± If your contract is impacted, you will be informed in line with agreed notice/contract.
12. What happens to my Swiss allowance if I still have a job?
The terms of employment will remain the same until transaction completion and you will remain eligible for all benefits unless communicated otherwise.
13. Have you been in touch with the unions?
We remain in contact with all our social partners and share a commitment to treat all employees fairly and to communicate openly throughout.
14. I am expecting a salary increase as of April 2023, will this still happen?
We will continue to honor our obligations and already communicated salary increases will still be effective from April 2023.
15. Will I receive a bonus for my hard work through 2023?
We will continue to allocate for a 2023 performance bonus for those eligible. We are committed to treat all employees fairly, any bonus plan will be based on both business and individual performance. The Swiss Federal Council retain the right to wholly or partially restrict variable compensation or prescribe adjustment to the Credit Suisse remuneration. Should this be requested and required we will communicate at the earliest opportunity.
16. What happens to my UCA/unvested stock?
We are committed to treating all employees fairly. We do not anticipate making any adjustments to UCA and deferred award programs for employees already paid and committed to employees up to the acquisition close date. We will ensure you are keep (sic) informed should there be any changes post close.
17. I am leaving Credit Suisse; do I need to pay back my UCA ("Upfront Cash Award")?
The Upfront Cash Awards that have been granted continue as per the rules of the award. In the event of resignation, the claw back conditions continue to apply.
18. What happens to my Credit Suisse vested stock?
Fully vested stock is not impacted by this event and will be made available (if not already) per existing process. Any share awards exercised or vested before close shall be settled in the form of share consideration structured so that the Awards beneficiaries shall receive for each Credit Suisse shares the merger consideration otherwise receivable. After close, all deferred share awards shall be (upon exercise or vesting as applicable) settled in the form of the new company shares instead of Credit Suisse shares.
19. Will I receive the Transformation Award that was recently communicated to me?
We anticipate the cash component of the transformation award will continue to be paid in line with the terms of the award. We will confirm any impact on the equity component at the earliest opportunity once the transaction has closed.
The Swiss Federal Council retain the right to wholly or partially restrict variable compensation or prescribe adjustment to the Credit Suisse remuneration. Should this be requested and required we will communicate at the earliest opportunity.
20. What will be the impact on my deferred awards if the buyer values shareholder equity at little or zero?
This will be subject to the agreement we close and will be communication (sic) at the earliest.
21. What happens with my pension contributions? Is my pension safe?
The terms of employment will remain the same until transaction completion and your pensions contributions will continues (sic) to be made in line with your election as long as your employment continues.
22. What will happen to CS pensioners?
The Pension funds are secured under the Pensionskasse and regulations. The funds are managed independently from the company and will not be affected.
Also Read:?Credit Suisse?& Citi Group Halt Loans To Adani Group Companies
Memo sent to staff from Credit Suisse Chairman Axel Lehmann and CEO Ulrich K?rner mentioned this:
Dear Colleagues,
We would like to start by sharing our heartfelt thanks to you all for your commitment and dedication to our clients, and to each other, during what has been a very difficult period for our bank.
We know that many of you will have been following the intense media coverage over the past 48 hours on the future of Credit Suisse and appreciate the enormous uncertainty and stress that this has caused. Over the past few days, the management teams of Credit Suisse and UBS, as well as our key stakeholders in Switzerland, have been in talks to set the best course of action for our bank, for our home market, and for our clients, colleagues and shareholders.
In the last few hours, we have agreed that Credit Suisse will merge with UBS, with UBS being the surviving entity in an accelerated process.
The merger transaction remains subject to customary closing conditions and is expected to be consummated by end of 2023.
The Board of Directors and Executive Board will give their support to UBS to ensure a smooth transition and ensure the best outcomes for all our stakeholders, including our people.
We appreciate that you will have many questions, some of which we may not be able to answer today; however, our colleague FAQs aim to provide some initial answers. These will be regularly updated over the coming days. Client Talking Points will also be available on the Intranet for our client-facing colleagues.
Please note that there is no immediate impact on our clients and on our day-to-day working operations. Our branches and global offices will remain open, and all colleagues are expected to and should continue to come to work.
We want to reassure you that we are fully committed to managing this process with transparency and openness, to treating everyone with fairness and respect and to ensure that you are kept up to date as decisions are made to minimize uncertainty and disruption.
Finally, we would again like to express our gratitude to everyone at Credit Suisse for their tremendous efforts over the past few months, commitment and hard work. As a leadership team, we have taken great pride and have been inspired by your unwavering commitment to our bank and to our clients.
For more such interesting content and the latest financial news,?keep reading Worth.?Click here.