Winners and losers likely as Switzerland absorbs Credit Suisse layoffs

EFG International AG

03/08/2023 14:12

(Repeats story that ran earlier to add reporter's byline)
    By Noele  Illien
       ZURICH, Aug 3 (Reuters) - Switzerland's financial
capital is bracing itself for the biggest wave of job losses in
over a decade following Credit Suisse's collapse earlier this
year.
    Since the government engineered a rescue of the 167-year-old
bank in March by merging it with rival UBS  UBSG.S , tens of
thousands of jobs have been expected to go.
    UBS is likely to provide more specifics later this month on
its plans. Its savings targets and indications from insiders and
analysts suggest it might be looking at cutting about a third of
the combined group's global workforce, or some 30,000-35,000
jobs. 
    In Switzerland, up to 10,000 jobs could be affected with
Zurich bearing the brunt if UBS goes ahead with its indicated
preferred option of absorbing Credit Suisse and cutting
overlapping jobs and operations.
    That would be the biggest setback for the Swiss finance
sector since the 2008 financial crisis when UBS had to be
rescued by the government, UBS and Credit Suisse laid off
thousands of staff and the Swiss economy shrank 2.3% in 2009 as
it felt the impact of the crisis. 
    This time round the economy is in much better shape,
creating good job prospects for some in the finance sector but
not all.
    With a national unemployment rate of just 1.9% in June, and
1.6% in the Zurich area, one of the lowest across Europe,
Switzerland can absorb a good number of the people cut from the
merged bank over the next 24-36 months, said headhunter Fredy
Hausammann, who leads the Swiss arm of Amrop Executive Search. 
    "In Switzerland in the financial services industry there is
a shortage of qualified staff across many disciplines,"
Hausammann said.
    However, he thinks it could be harder for those let go in
higher management levels, such as senior and managing director,
to find a good fit elsewhere. 
    "The large banks have many highly paid very specialized
roles, where frankly there is very little demand in the market
outside UBS and Credit Suisse," he said.
    Job cuts at Credit Suisse will hit Swiss and foreign
nationals on its payroll, which may mean some have to leave
Switzerland if they can't find a new job.
    Big global banks have also been cutting staff amid weakness
in M&A and capital markets businesses.
    Still, one middle manager at Credit Suisse, a foreign
national who did not wish to be identified, said he has already
been approached by financial services firms with job
opportunities but has yet to actively apply for any because he
doesn't know yet whether he will get a severance package or a
job opportunity at UBS. 
    "Currently all options are not too bad which is why I
haven't been applying yet," he told Reuters.
    
    SKILLS MISMATCH
    The Swiss government meanwhile is trying to ease public
concern about the prospect of waves of job cuts.
    "Considering the shortage of labour in all sectors, it can
be assumed that the Swiss labour market would be able to absorb
any mass layoffs," a spokesperson for the State Secretariat for
Economic Affairs said in an emailed response to Reuters. 
    Swiss staffing company Adecco said demand for finance
professionals, including financial analysts, accountants and
controllers, remains robust and demand has increased by 7% this
year compared to the second half of 2022.
    A report by Arbeitgeber Banker, an association representing
employers at Switzerland's banks, shows there were 6,681 job
openings in the Swiss financial sector at the end of June but
there were also 2,411 people currently unemployed within the
sector, which employs more than 120,000 people in total.
    "We have a certain mismatch between the open positions and
the type of profiles that are on the market," the association's
head, Balz Stueckelberger, said. "Many of the current vacancies
do not seem to match the profiles the unemployed people have."
    Positions that are more frequently being automated, such as
back office roles, may be harder to fill, he said.
    A separate association representing Swiss bank employees has
previously demanded UBS freeze layoffs until the end of 2023. 
    Some of Credit Suisse's workforce have already taken other
opportunities, with UBS Chief Executive Sergio Ermotti saying in
June that around 10% of staff had already left. 
    Swiss banks have been looking in particular to snap up
relationship managers with strong client relationships and solid
books. 
    Last month Lombard Odier announced it had hired Credit
Suisse banker Marco Arnold and his team to open a new office for
the Swiss wealth manager in the town of Zug.
    EFG's Chief Executive Giorgio Pradelli said the Swiss
private bank was taking advantage of the talent on the market
and hiring across geographies and functions. 
    Presenting the bank's half-year results, Pradelli said that
EFG had already exceeded its aim of hiring 50-70 client
relationship officers this year and that he expected the number
to reach triple digits by the end of 2023.
    "I'm sure we are going to see some new (redundancy) waves
(in Switzerland's finance sector) and hopefully we will again be
very well positioned to hire," he said.

 (Reporting by Noele Illien; Editing by Susan Fenton)
 ((Noele.Illien@thomsonreuters.com; +41 41 528 39 73;))