According to reports Credit Suisse, a Switzerland-based bank is contemplating trimming its workforce. It is believed that the bank is planning to trim around 5000 jobs – one in ten in an attempt to cut costs, according to a source aware of the development. The bank has said that the year 2022 is going to be the year of Change.
Cost Cutting Exercise
According to the source, the discussion on workforce trimming is still under process and there are chances of alteration in figures. According to a news report from Blick earlier, it is estimated that around 300 jobs would become obsolete in the bank.
Reportedly, the bank has said that it plans to cut costs below 15.8 billion to 16.8 billion estimated earlier.
The bank is making losses, it has been involved in lots of scandals recently. The bank lost more than 1.59 billion francs in dealing with legal matters, reportedly. Further, the bank is also convicted, allegedly because of its inability to prevent illegal money transfers by a Bulgarian-based drug trafficking gang. This is reported to be the first such trial of a bank in the country.
Credit Suisse CEO, Ulrich Koerner, 59, who has spent more than two decades with leading banks of Switzerland has been bestowed with the responsibility to help the bank recover from shocks. Koerner has been associated with the Zurich-based bank for more than a decade. The CEO, rejoined the bank the previous year and was promoted to the post, only a month ago.
Experts aware of the matter, believe that the bank should move beyond reducing costs and come up with a long-term strategy. Experts believe that reducing costs could lead to poor services, which could lead to customer loss.
Cutting costs is the easiest immediate step it can take. But it’s not a strategy,” said Andreas Venditti, an analyst with Vontobel. “You can end up in a vicious circle, where jobs are cut, service declines and customers leave.”
The analyst also believes that the bank could also need to raise capital to compensate for the losses it might have to make in a restructuring process. According to an estimate the bank might need to raise 4 billion Swiss francs to restructure.
Meanwhile, the bank is also ambitious in its expansion in China. According to an employee placed at a senior position in a bank, the bank is contemplating starting to offer Wealth Management Services.