Latest reports have confirmed that UBS Group AG will be laying off 20-30% of its workforce.
Last month, i.e., March 2023, Swiss authorities persuaded UBS Group AG to buy rival Credit Suisse Group AG to stop a banking crisis from spreading.
UBS Group To Layoff 20-30% Workforce
After acquiring Credit Suisse Group AG, UBS Group AG will reduce its workforce by 20 to 30 percent, eliminating up to 36,000 employees globally, according to Swiss daily Sonntagszeitung, which cited a senior manager at UBS.
In a deal crafted by the Swiss government, the central bank, and market regulator to prevent a collapse of the nation’s financial system, UBS agreed to acquire rival Credit Suisse of Zurich for 3 billion Swiss francs ($3.3 billion).
But, the deal, which was also intended to contribute to ensuring global financial stability, has generated questions regarding the scale of a new bank with $1.6 trillion in assets and more than 120,000 employees worldwide.
The bank could eliminate 11,000 employees in Switzerland, according to the article.
UBS To Abandon Deal?
As UBS prepares to abandon a deal that would have given Wall Street dealmaker Michael Klein control of much of Credit Suisse’s investment bank, jobs in its U.S. investment banking unit will also be impacted, according to the report.
To prevent a banking system collapse in the nation, the Swiss government, the central bank, and the market regulator negotiated a deal for UBS to acquire rival Credit Suisse of Zurich for 3 billion Swiss francs ($3.3 billion).
The deal, however, has sparked questions about the scale of a new bank with $1.6 trillion in assets and more than 120,000 employees worldwide. The deal is intended to help secure financial stability globally.
According to the article, the bank may eliminate 11,000 positions in Switzerland.
Jobs at its US investment banking unit may also be impacted, according to the source, as UBS is preparing to negotiate the termination of an agreement that would have given Wall Street dealmaker Michael Klein control over a significant portion of Credit Suisse’s investment bank.
World’s Biggest Banks Join Forces To Save Credit Suisse Bank
To achieve this some of the world’s largest central banks came together on Sunday.
As part of this deal, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse.
It will assume up to $5.4 billion in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.
The move has affected S&P 500 and Nasdaq futures which were each up 0.4%, both giving back some earlier gains.
