Switzerland's Second-Biggest Bank Credit Suisse May Layoff 5,000 Employees
Credit Suisse is considering cutting around 5,000 jobs as part of its cost reduction drive. Last two years have seen the bank run into huge losses, and suffer a rare court conviction along with a 40% drop in its shares.
Switzerland¡¯s second biggest bank Credit Suisse is considering cutting around 5,000 jobs as part of its cost reduction drive, as per Reuters report.
The scale of the potential layoffs underlines the challenge which Credit Suisse and newly appointed CEO Ulrich Koerner are facing, with the latter seeking to stabilize the bank after a string of scandals.
The second biggest bank of Switzerland has dubbed 2022 a "transition" year with a change of guard, restructuring to curtail risk-taking in investment banking and bulking up wealth management.
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The Zurich-based bank has also dismissed speculation that it could be bought or broken up, as per the report. The discussions about layoffs are ongoing and the number of reductions could still change, the source said. Swiss newspaper Blick earlier reported that more than 3,000 jobs would be laid off.
Credit Suisse has already said it will cut costs below 15.5 billion Swiss francs ($15.8 billion) in the medium term, versus an annualised 16.8 billion francs this year, as per Reuters.
59 year old Koerner was promoted to the CEO position over a month ago, and has been given the task of paring back investment banking and cutting more than $1 billion in costs to help the bank recover from a string of setbacks and scandals. The Swiss lender is reportedly under increasing pressure to turn around the business and improve its financial resilience.
Koerner succeeded Thomas Gottstein as CEO in August 2022 after a tumultuous two years highlighted by huge losses, a rare court conviction for the bank in Switzerland and a 40% plunge in its shares.
Also Read: Swiss National Bank Earns Billions Of Dollars In Profit With 'Negative Interest Rates'
Tough Times For The Bank
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Between April 2022 and June 2022, the bank chalked up a 1.59 billion Swiss franc loss, as legal costs mounted. Its investment bank alone lost 1.12 billion Swiss francs before tax, as per the report.
Twin hits in the form of a $5.5 billion loss on the default of U.S. family office Archegos Capital Management and the shuttering of $10 billion of supply chain finance funds linked to collapsed British financier Greensill, have also adversely impacted the bank.
In June 2022, Credit Suisse was also convicted of failing to prevent money laundering by a Bulgarian cocaine trafficking gang in Switzerland's first criminal trial of one of its major banks. In this case the bank was slapped with a huge fine of $2.1 Million, and it is currently appealing against the conviction.
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