Credit Suisse to lay off one in five employees
9000 of the bank’s 45 000 employees worldwide will lose their jobs. Among them are many residents of the European region, including Luxembourgers. By the end of the year, Credit Suisse will lay off 700 people. Layoffs will continue until 2025. The bank aims to cut its cost basis by $2.5 billion or 10-15%. Consultant spending will be reduced by 50%. 30% less will be spent on outsourcing.
In the third quarter of 2022, Credit Suisse, Switzerland’s second largest bank, documented a CHF 4 billion loss. The net outflow of assets amounted to CHF 12.9 billion . Now the bank is looking for investors: the National Bank of Saudi Arabia is already planning to invest 1.5 billion francs of the 4 billion needed.
The last weeks have been particularly difficult for Credit Suisse. In October, the bank’s shares fell to CHF 3.55, losing 55% of their value compared to the beginning of the year. Credit default swap spreads were also extremely wide at 247 basis points (15%). The bank has not seen such a situation since the crisis of 2009. These indicators made investors wary of a repeat of the Lehman Brothers situation in 2008.
In parallel with the news of a 20% reduction in staff, Credit Suisse has announced the creation of an investment bank, First Boston. With it, Credit Suisse plans to earn up to 14% of all its profits by 2025.
