UBS saved Credit Suisse, but thousands of jobs in India are at risk: Report

Although Union Bank of Switzerland (UBS) may have rescued crisis-hit rival Credit Suisse from the brink, various reports suggest that thousands of Indian jobs could still be at risk inspite of the deal. Jobs of employees working primarily at the two bank’s India technology back-offices are likely to be most vulnerable, as UBS on Sunday announced its plans to cut costs of the combined business by about $8 billion by 2027, which is nearly half of what Credit Suisse spent last year.

“India & Pune are likely to be hit by the merger as most of jobs are backend operation jobs & likely to have duplication with #UBS,” Vinit Deo, Founder of financial advisory firm Posiview Ventures, tweeted. He pointed out that Credit Suisse India headcount is approx 15,000 — which is 25 per cent of their global workforce.

₹CreditSuisseIndia headcount is approx 15k; 25% of their global workforce. #UBS Chairman Kelleher says:“Let me be very specific on this: UBS intends to downsize Credit Suisse’s investment banking business and align it with our conservative risk culture,”

— Vinit Deo (@PosiviewGroup) March 20, 2023

As the bank mentioned about cost-cutting, the concern of job losses grew significantly as well. Swiss unions raised concern on Tuesday (March 21) about job losses, two days after UBS swept up Credit Suisse in a government-brokered rescue.

The impact is not yet known for the 40,000 employees of the banks, the president of the Swiss union ‘USS,’ Pierre-Yves Maillard, said, but he called on the Switzerland government to take measures to ensure a smooth transition.

“The first obvious fact is that there should be no bonuses for the management and the top management of these companies, that should be common decency. We should even ask for them to pay back what they earned those past two years,” he said.

Sunday (March 19) saw the most dramatic state intervention since the 2008 global financial crisis, with UBS buying Credit Suisse for 3 billion Swiss francs ($3.2 billion) in a takeover backstopped by unlimited funding pledges from the world's top central banks.

The banks, two of the most systemically relevant in global finance, hold combined assets of up to 140% of Swiss gross domestic product, according to the central bank, in a country heavily dependent on finance for its economy.

The speedy orchestration of Credit Suisse's takeover was received by investors as an acceptable measure to stem contagion, but fears that other struggling banks might still be next in line to teeter kept markets on edge.

Though UBS hasn't revealed on how many jobs may be at stake from the merger, it indicated the number will be significant. The firm said in a statement that it plans to cut the combined company's annual cost base by more than $8 billion by 2027. That's almost half of Credit Suisse's expenses last year.

(With inputs from Reuters)

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