Swiss bank Credit Suisse has announced additional job cuts of 5,300. According to Reuters, the bank also announced a $2.5 billion loss in October and November, primarily in investment banking. The bank blamed the loss on adverse market conditions and risk reduction.
These job cuts represent 11% of Credit Suisse’s total headcount of 50,300. They will be implemented “across all divisions throughout the bank” by the end of the second quarter of 2009. The investment banking business will suffer two-thirds of the job cuts as its staff is reduced from 21,300 to 17,500 by the end of 2009. These cuts include the already announced cut of 650 investment banking jobs in Brittan and 170 jobs in Asia.
UBS, the other major Swiss bank, had previously announced in October that it is cutting 2,000 investment banking jobs, in addition to the 4,150 positions it cut earlier this year. UBS will reduce its investment banking workforce by 25% to approximately 17,000 and its total headcount to under 80,000.
The Japanese brokerage firm Nomura Holdings also announced that it will fire up to 1,000 staff in London. According to an additional report by Reuters, this decision followed an internal review of the purchases of the Asian, European, and Middle Eastern assets of Lehman Brothers, and represents the first big job cuts after that acquisition. Nomura spent $2 billion on the Lehman acquisition, including payments to employees to encourage them to stay with Nomura.
These continued job cuts brokerage firms worldwide are dramatically shrinking employment in the financial services industry, and it may take years before the industry can once again begin to expand. For now, however, there is no sign when this bloodletting will cease.
These job cuts are likely to result in an avalanche of legal needs ranging from resolution of employment related issues (bonuses, ERISA benefits, non-compete agreements, etc) to setting up new financial service businesses with attendant licensing, registration and corporate needs.
Page Perry is an Atlanta-based law firm with years of collective experience representing individuals in employment disputes with brokerage firms. The firm is also active in setting up registered investment advisors, establishing hedge funds and dealing with regulatory matters. For further information, please contact www.pageperry.com.