Posted inBusiness moves

Credit Suisse to cut 2,000 more jobs, save another CHF800m

Credit Suisse is to eliminate another 2,000 jobs and make an additional CHF800m (£576.1m, $824m, €733.8m) in cost savings, as it accelerates the pace of its restructuring following disappointing results in the final quarter of 2015.

Tidjane Thiam, chief executive of Credit Suisse, said on Wednesday: “Since October 2015, we have made good progress in reducing our fixed cost base across the organisation and our cost programme is moving at pace.

“Today, we are announcing an increase to our 2018 cost reduction target from CHF3.5bn gross savings to at least CHF 4.3 billion, driving our absolute operating cost base below CHF18bn by 2018. For 2016, we aim to achieve CHF1.7bn in cost savings.”

On 4 February, Switzerland’s second largest bank announced that it would cut 4,000 jobs – an additional 2,000 job cuts in the general markets business were announced on Wednesday. All 6,000 jobs, a significant proportion of which are contractor/consultant positions, will be eliminated by the end of 2016, with 2,800 having already been cut.

Further cost savings

The additional CHF800m in cost savings will be derived from the bank’s general markets activites. The division has suffered disappointing results, having been negatively impacted by a combination of a high and inflexible cost base, exposure to illiquid inventory in fixed income, historically low levels of client activity, and challenging market conditions.

The challenging environment, which started in 4Q15, continued into the first quarter of 2016.

“In this context, we have taken immediate action to reduce outsized positions in activities not consistent with our new strategy and systematically reduced our exposures. Write-downs were $633m in 4Q15 and were lower in 1Q16 at $346m as of 11 March 2016. Revenues have remained weak in the period, with negative operational leverage,” Thiam said.


“More fundamentally and in parallel, we have reassessed our portfolio of business in this new context and are engaged in a further restructuring of global markets. Going forward, our [global markets] activities will be more closely aligned to our wealth management and IBCM divisions,” Thiam said.

As part of the bank’s cost-cutting, Credit Suisse announced on Tuesday that it has sold its private banking business in Gibraltar and Monaco to fellow Swiss bank J. Safra Sarasin. The sale of the private banking division is expected to release cost savings of $0.5bn in 2016. 

Part of the Mark Allen Group.