UBS cuts 3,000 jobs as it posts record profits after bailing out Credit Suisse

Fears for thousands of jobs in the city have mounted as UBS announced the first tranche of cuts following the bailout of ailing Credit Suisse.

According to UBS, 3,000 jobs would be lost in their home country of Switzerland alone. This is likely just the beginning of a workforce reduction that will include 120,000 employees worldwide in centers from London to New York.

UBS aims to save £8 billion after takeover deal. Analysts estimate that between 30,000 and 35,000 jobs could be lost.

Credit Suisse already lost 8,000 employees in the first half of the year.

UBS declined to comment beyond its announcement on the jobs in Switzerland.

Job cuts: UBS will cut 3,000 jobs in its home country of Switzerland alone, UBS announced. This is likely just the beginning of a workforce reduction of 120,000 employees worldwide

This will prolong uncertainty for staff in the UK, where UBS employs 6,200 people in cities including London, Birmingham and Manchester.

Credit Suisse employed 5,500 people in the UK prior to the merger.

UBS snapped up its one-time rival in a discounted £2.7 billion deal brokered with the backing of Swiss authorities, avoiding a major meltdown after panicked clients siphoned tens of billions from scandal-plagued Credit Suisse.

The acquisition was agreed in March and completed in June. Results released yesterday by UBS, the first since the deal, showed a record-breaking £23bn profit for the second quarter, but that was thanks almost entirely to an accounting quirk that reflected the cost of the Credit Suisse takeover could be stretched far were below their value.

Excluding this win, the bank reported a much more modest bottom line of £870,000.

Separate results from Credit Suisse showed that deposit exodus continued, with outflows of £35 billion in the quarter, although UBS said the trend reversed in June.

UBS also yesterday outlined plans to acquire Credit Suisse’s Swiss arm, despite arguing that a spin-off would reduce risks and be better for jobs and competition.

CEO Sergio Ermotti said: “Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders and the Swiss economy.”

The Credit Suisse brand will disappear when UBS completes client onboarding into its system in 2025.

Investors welcomed the update, sending shares up nearly 6 percent. However, Jefferies analysts warned that the integration would be “lengthy, challenging and likely bumpy.”

Victoria Scholar, head of investment at Interactive Investor, said Ermotti faces “tough decisions… and the daunting challenge of balancing the need to retain key employees while also executing a large downsizing.”