Credit Suisse bankers are preparing for a fresh wave of layoffs after its shotgun wedding to Paradeplatz rival UBS. They could find help from an unlikely source — former Credit Suisse bankers.
Credit Suisse has battled an exodus of senior bankers over the past two years as it has been rocked by successive crises, many of which have been hoovered by rivals including Barclays, Citigroup, Goldman Sachs, Jefferies and Morgan Stanley. Deep job cuts in the final quarter of last year has also meant many have just arrived in new roles in 2023, according to conversations with current and former staff.
"I started my new job today after my entire team was cut in November," said one former senior Credit Suisse investment banker. "My message to my former colleagues is simple — call me."
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The scope of job cuts from the $3.2bn acquisition of Credit Suisse by UBS on 19 March is not yet clear. UBS chair Colm Kelleher said the intention is to "downsize Credit Suisse's investment bank and align it with our conservative risk culture" and that the combined investment banks would account for no more than 25% of the group's risk-weighted assets.
"I left Credit Suisse begrudgingly late last year and I have a lot of sympathy for my former colleagues," said another ex-Credit Suisse banker. "I am offering to help where I can."
Social media platform LinkedIn has been flooded by former Credit Suisse bankers extending an olive branch to their beleaguered former colleagues. Many spoke of "exceptional and talented" individuals, "passionate professionals" or the "Credit Suisse family" and offered to open doors to the Swiss bank's current employees.
Credit Suisse employs around 17,000 people within its investment bank and close to 5,500 people in the UK alone. The Financial Times reported that up to a third of the 120,000 employees in the combined banks could go, with Credit Suisse's investment bank set to feel the brunt of the cuts. UBS is looking to strip out CHF8bn of costs by 2027, 75% of which will come from employee-related expenses.
Internally, senior managers are encouraging staff to look for alternatives, according to people familiar with the matter. One senior banker told juniors they would be "mad not to dust off their CV", according to one Credit Suisse insider.
Logan Naidu, chief executive of headhunters Dartmouth Partners, said that Credit Suisse bankers have been flooding consultants with calls since the acquisition was announced.
"People are assuming the worst there," he said. "There are banks which have expressed interest in Credit Suisse talent and there are conversations to be had. My advice is the quicker the better."
A 20 March memo to staff from Credit Suisse chief executive Ulrich Körner and chair Axel Lehmann, said there would be no immediate job cuts. "We work diligently and at pace throughout the coming period to identify which roles might be impacted," the memo said.
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However, senior dealmakers contacted by FN said they expected deep cuts and one managing director said that "no assurances have been given to anyone" over jobs. European dealmakers were particularly anxious about their future, he said.
CS First Boston, the investment banking spin-off set to be led by former Credit Suisse board member Michael Klein, was pitched as a 'super-boutique' run like a Goldman Sachs-model partnership that would help restore lustre to the Swiss bank's dealmaking unit. Thousands of dealmakers were set to transfer across to the new unit, but its future hangs in the balance.
Credit Suisse executives told employees during an all-hands town hall meeting on 20 March that the deal was still being assessed by UBS executives. However, bankers contacted by FN said that senior managers were advising dealmakers to either look for new roles or to trust that UBS bankers would make the right choices on which bankers to move across.
"They [UBS] are getting access to some exceptional people," said one senior banker. "The US investment bank is where UBS will focus the investment banking attention, given their poor performance there."
UBS's Kelleher said that the bank will look to wind down Credit Suisse's trading operations, managing most of this through a "non-core division". Meanwhile, chief executive Ralph Hamers said that Credit Suisse dealmakers could fill some gaps for UBS.
"Credit Suisse's strength, particularly in the US and the technology sector, makes a very good fit to our strategy, where we know that technology entrepreneurs are the wealth creators of the future," he said.
Credit Suisse is making deep cuts during a tough time for banking jobs. Goldman Sachs stripped out 3,200 roles in January, but banks including Barclays, Citigroup, Deutsche Bank and Morgan Stanley have all trimmed dealmakers in recent months as activity has stalled. Many are expecting a second wave of job cuts later this year if revenues do not improve. Investment banks have made $13bn in fees so far in 2023, according to data provider Dealogic, a 38% decline on the same period last year.
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