Swiss banking giant slashes more jobs in cost-cutting exercise

Credit Suisse, Switzerland's second-biggest bank, intends to cut more than 5,500 jobs during 2017, said news agencies on Tuesday.

Swiss banking giant slashes more jobs in cost-cutting exercise
File photo: Fabrice Coffrini/AFP
That's a continuation of the cost-cutting policy that saw the bank slash over 7,200 jobs last year in an attempt to reduce its fixed operating base cost. 
The news came as the bank also said it booked a net loss of 2.4 billion Swiss francs (2.2 billion euros, $2.3 billion) in 2016, after agreeing to a massive settlement with the US authorities last month over its role in the so-called sub-prime crisis in 2008.
Credit Suisse said in a statement that its net loss was narrower than a year-earlier figure of 2.9 million Swiss francs.
“2016 was the first full year of implementing our new strategy and it was a challenging and busy 12 months,” said chief executive Tidjane Thiam.
“We have significantly reduced our fixed operating cost base and increased our operating leverage.”
Last month, the US authorities announced a $5.28 billion settlement with Credit Suisse over its role in the sale of the kind of toxic securities that led to the global financial crisis of 2008.
Federal prosecutors say Credit Suisse has admitted that between 2005 and 2007 it knowingly deceived investors in the sale of complex securities derived from residential mortgages.
The system-wide failure of such securities in 2008 caused a cascading wave of bankruptcies and crises that touched off the Great Recession, which cost tens of millions of jobs around the world.
“We have reached an agreement with the US Department of Justice on the … matter, thus removing a major source of uncertainty for our future,” CEO Thiam said on Tuesday.
With the bank's US case resolved, Thiam can redouble attention on a reform drive he laid out after taking charge of Credit Suisse following a stint leading insurance giant Prudential.
Thiam wants the bank to focus more on wealth management and de-emphasize its riskier investment banking operation.
He has also prioritised cost cutting, trimming more than 7,000 jobs mostly in New York and London over the last year, while eyeing ways to boost capital.
Much attention has been focused on tentative plans for an initial public offering for its Swiss unit.
Thiam on Tuesday told the Bloomberg news agency that the Swiss IPO was “a good option” but cautioned that other scenarios were “continuously” being looked at to improve Credit Suisse's capital.
On the Swiss stock exchange, Credit Suisse shares were outperforming the overall market, showing a gain of 2.7 percent to 15.16 Swiss francs, while the blue-chip SMI index was little changed.

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Jobs: Why Zurich has rebounded better than other Swiss cities from Covid

The Covid pandemic hit Switzerland hard, although the country's largest city has rebounded strongly.

Jobs: Why Zurich has rebounded better than other Swiss cities from Covid

Measures imposed due to the Covid pandemic, which began in earnest in February 2020, shuttered businesses across the country and pushed many people out of work. 

When most notable Covid rules were relaxed in Switzerland in mid-February 2022, the economic recovery – highlighted by a strong job market – began in earnest in 2021. 

READ MORE: How the Swiss job market rebounded from the Covid pandemic

Nowhere was this more evident than Zurich, Switzerland’s largest and most economically powerful city. 

How did Zurich rebound from the Covid pandemic in comparison to the rest of the country?

Even though Zurich, along with other large Swiss cities like Geneva, Basel, Bern and Lausanne, have been hit hard by the pandemic from the employment perspective, Zurich’s labour market is now growing faster than in other urban centres.

One of the reasons for this upward trend is that young, well-educated foreigners are coming back.

In the first nine months of 2021, the city’s population grew significantly.

In September alone, it recorded 2,200 additional residents.

This is mainly due to people with a B residence permit, according to Klemens Rosin, methodologist at Zurich’s Statistics Office.

During the crisis, far fewer of them left the city. “This group is made up of well-educated, younger and mobile foreigners who have made a significant contribution to Zurich’s growth”, Rosin said.

Zurich’s employment market is expect to grow even further.

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That’s because in the coming years, many Zurich workers will retire — an estimated  210,000 by year 2050 — creating more job opportunities for younger employees.

In fact, according to a study commissioned by the canton in 2021, if Zurich’s economy is to continue to flourish, it will need around 1.37 million workers by mid-century.

If these vacancies will not be filled, then income, tax revenue and the financing of social security programs will be impacted.

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While it is difficult to predict what jobs will be most in demand in 2050 — what new technologies will emerge in the meantime — right now and in medium term, IT workers will be especially needed, experts say, because businesses will continue to to digitalise and automate.

Lower skilled jobs will also be in higher demand, including hospitality, retail and transport. 

With hundreds of thousands of vacancies to fill, people with the permission to work in Switzerland are likely to be flush with offers – particularly skilled workers with recognised qualifications. 

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