The first big wave of redundancies at Credit Suisse will come in July, mainly abroad. finews.asia asked Klaus Biermann, co-founder of Zurich-based executive search firm Biermann Neff, what employees of the failed bank should prepare for.
Mr. Biermann, there is talk in the media that UBS plans to lay off 35,000 employees starting July. Are you surprised by this figure, or is it within the bounds of what you would expect?
That number is within our expectations. The speed may come as a surprise to many, but when viewed soberly, it was to be expected. UBS mustn't lose any time in the integration and realignment process. Every day costs money, and the risk of additional assets flowing out is growing.
UBS CEO Sergio Ermotti said in March he wants to treat UBS and Credit Suisse bankers equally when it came to awarding jobs. Now the talk is that half the Credit Suisse jobs will be eliminated. Was this promise always to be taken with a grain of salt?
This hope was very high, at least among many Credit Suisse employees. There will certainly be adjustments in existing UBS teams.
«The option of an independent unit in Switzerland is no longer there»
However, we mustn't forget UBS took over Credit Suisse and wants and needs to keep UBS's culture and structure. It's in the driver's seat.
UBS wants to unwind most of Credit Suisse's investment bank where it employed the most staff until recently. Will the first wave hit investment bankers abroad first?
Yes. There will be massive layoffs in London, New York, and Asia, all locations where this is easier to implement. Switzerland, too, will undoubtedly lose several hundred jobs in the unit. However, we're convinced a very large proportion of these people will take on other exciting roles.
The options for Credit Suisse's Swiss business are open. How great are overlaps and what is the potential for reductions at Credit Suisse?
In our view, the option for an independent unit in Switzerland is no longer viable, at least for the time being. Perhaps UBS will separate the Swiss business at some point, but that will have little impact on the current personnel situation. In the middle and back office, we see huge overlaps, while other areas such as private banking, the corporate client business, or even asset management structures will remain largely in place for the time being.
UBS improved the social plans for the Swiss staff with immediate effect. Should local employees wait for the pink slip, or look for a new job?
For Credit Suisse employees, the last few months have been characterized by great anxiety, insecurity, and fear, but also by the constant hope that somehow things will still work out. The improved social plan gives employees a certain amount of security. However, those who are still waiting without also positioning themselves externally or consulting are living too much on hope.
«Cantonal banks and smaller private banks will not continue the excesses in CS bonuses»
When the big layoffs start in September and then in the fourth quarter and 2024 in Switzerland, the fight for jobs will be much bigger.
Hundreds of positions are open at other banks. Can these institutions absorb a potential wave of layoffs at Credit Suisse Switzerland?
Certainly. Many former Credit Suisse employees will find new jobs with stronger competitors. However, we hope that expectations in terms of salary, titles, and other benefits will be adjusted accordingly. We mustn't forget that despite the recent lack of bonuses in some cases, salaries and costs at Credit Suisse were simply too high. Cantonal banks and smaller private banks will not continue such excesses.
Klaus Biermann is co-founder of Zurich-based executive search firm Biermann Neff that specializes in finding financial industry talent. Its focus is on wealth and asset management, alternative investments, and private market investments, as well as digital transformation.
