Credit Suisse to make heavy job cuts in Europe
Swiss bank Credit Suisse plans to cut up to one-third of senior employees in its European investment banking department, three sources familiar with the matter said, as a weak economy and tighter regulation continue to erode capital raising and advisory activities.
“In the European investment banking business, they are going to get rid of 60 directors and managing directors,” one source said on Monday. The cuts are part of a plan announced last year to sever some 3,500 jobs throughout the bank worldwide, but the focus on core investment banking signals that corporate despair about the economy persists worldwide. The securities industry lost about 28,100 jobs during the economic crisis of 2008 and 2009. Surging markets over the next 15 months led to the addition of 10,000 jobs but pessimism after that brief spate of hiring has returned. The new cuts at Credit Suisse, which earlier this month was slammed with a rare public warning from Swiss regulators to bolster capital, will affect bankers who advise on mergers and acquisitions, stock market listings, financing and debt issues. “It is about a third of the directors and 10-15 percent of the MDs,” the first source said, referring to what are typically the two most senior job ranks in the banking world.
The layoffs are expected to begin in July and could continue over several months, the person said. A second source said the cuts could end up affecting 20-30 percent of senior investment banking staff in Europe. Credit Suisse, which last year said it hopes to eliminate $2.1 billion in annual costs by the end of 2013, declined to comment.
Other major investment banks have begun cutting jobs after a rough start to the year. About 4,400 securities industry jobs were lost in the first three months of 2012 in the United States alone -- the third consecutive quarterly decline, according to US government statistics. Several global banks have axed at least 50 people in Asia in the past three weeks, and more are on the way.