According to recent updates, UBS Group AG is set to reduce its workforce by 20-30%.
This decision comes after Swiss authorities convinced the bank to acquire its competitor, Credit Suisse Group AG, in March 2023, in order to prevent a banking crisis from spreading.
UBS Group To Layoff 20-30% Workforce
A senior manager at UBS Group AG reportedly informed Swiss daily Sonntagszeitung that the bank plans to lay off 20-30% of its workforce, which could result in up to 36,000 job cuts worldwide.
This decision comes after UBS acquired Credit Suisse Group AG, as reported by the same source.
To prevent the collapse of Switzerland’s financial system, a deal was formulated by the Swiss government, central bank, and market regulator, which involved UBS Group AG acquiring Credit Suisse Group AG of Zurich for a sum of 3 billion Swiss francs ($3.3 billion).
While the acquisition of Credit Suisse Group AG by UBS Group AG was aimed at promoting global financial stability, the resulting bank, with over 120,000 employees globally and $1.6 trillion in assets, has raised concerns about its size.
As per the article, the bank may eliminate 11,000 jobs in Switzerland due to the acquisition.
UBS To Abandon Deal?
According to the report, the decision by UBS Group AG to withdraw from an agreement that would have given Michael Klein, a prominent Wall Street dealmaker, control over a significant portion of Credit Suisse’s investment bank, will also have an impact on jobs in the bank’s U.S. investment banking division.
In order to avoid a potential banking system collapse in Switzerland, the Swiss government, central bank, and market regulator collaborated to formulate a deal, under which UBS Group AG acquired Credit Suisse Group AG of Zurich for a sum of 3 billion Swiss francs ($3.3 billion).
Although the acquisition of Credit Suisse Group AG by UBS Group AG was aimed at promoting global financial stability, it has raised concerns about the size of the resulting bank, which will have over 120,000 employees globally and $1.6 trillion in assets.
As per the article, the acquisition could lead to the elimination of 11,000 jobs in Switzerland.
As per the source, UBS Group AG is reportedly preparing to terminate an agreement that would have granted Wall Street dealmaker Michael Klein control over a substantial part of Credit Suisse’s investment bank.
This move may also have an impact on jobs in UBS’s U.S. investment banking unit.
World’s Biggest Banks Join Forces To Save Credit Suisse Bank
On Sunday, some of the world’s largest central banks collaborated to make a deal, under which UBS Group AG agreed to pay 3 billion Swiss francs ($3.23 billion) to acquire Credit Suisse Group AG, a 167-year-old financial institution.
As part of the deal, UBS will take on potential losses of up to $5.4 billion, backed by a substantial Swiss guarantee, and the acquisition is expected to be concluded by the end of 2023.
The announcement of the deal had an impact on S&P 500 and Nasdaq futures, which initially rose by 0.4% but subsequently retraced some of their gains.
