According to several news outlets, the struggling Swiss bank Credit Suisse plans to let off around 10% of its staff as part of a large cost-cutting initiative.
Someone with firsthand knowledge of the situation told Reuters on Thursday that 5,000 positions, or roughly one out of every ten at Switzerland’s second largest bank, are likely to be slashed.
Credit Suisse did not respond to Reuters’ confirmation efforts. Instead, it continued stressing that it would provide an update on its strategy review when it published its third-quarter profits next month. The bank also stated that it was too early to comment on the outcome of this review.
A series of scandals and rising legal costs have contributed to the size of the potential job cuts. Credit Suisse was found guilty in June of failing to prevent a Bulgarian drug trafficking ring from laundering money in Switzerland’s first criminal prosecution of one of its major banks. The bank wishes to reverse the judgment.
In addition, the bank is currently grappling with the fallout from the collapses of the Archegos hedge fund and the Greensill financial organization.
The corporation is currently in what it refers to as a “transition” year. It has a new CEO, Ulrich Koerner, and is taking initiatives to reduce the risk of investment banking and improve wealth management.
According to a Reuters source, conversations regarding job losses are still ongoing, and the amount of cuts might alter. A Swiss publication, Blick, reported earlier that around 3,000 jobs will be lost, with the majority of them coming from the Zurich headquarters.
Credit Suisse has previously stated that it plans to reduce expenses to less than CHF15.5 billion ($15.8 billion) in the medium term. So yet, no word on how many jobs will be lost.
More and more individuals are placing pressure on the Swiss lender to turn around its company and become financially stronger. Koerner was appointed CEO a little more than a month ago. He has been urged to cut back on investment banking and save more than $1 billion to help the bank get back on its feet following a string of failures and scandals.
