European banks contemplate massive job cuts
2019 was a year of big job cuts in banking, with around 75,000 cuts announced in total. 2020 began badly with HSBC's decision to cut 35,000 jobs in February, but many banks paused layoffs when the virus broke out. This could soon change dramatically.
As banks with existing layoff plans put them back into action, new banks are starting to eye the possibility of making substantial cuts of their own. The Europeans are at the front of the queue. Deutsche Bank and HSBC are already cutting around 20% and 15% of their staff in total. Now the Swiss banks and Commerzbank are contemplating doing the same.
Commerzbank's cuts seem most likely. Germany's second largest bank is reportedly drawing up plans to cut up to 25% of its workforce over four to five years. Nothing is certain - the plans are "under discussion" while Commerz is also in search of a new CEO after its former chairman and chief executive stepped down in July. If they happen, many of the cuts are likely to be in the retail bank (with 'digital' an ongoing area of focus), but 25% is a large proportion of the workforce however you look at it.
Almost equally large numbers were being bandied about yesterday in relation to a highly putative merger between UBS and Credit Suisse. Swiss finance blog Inside Paradeplatz wrote on Monday that UBS chairman Axel Weber and Credit Suisse chairman Urs Rohner have been convening to discuss a possible merger of the two banks as early as next year. Were it to go ahead, the merger could lead to 10% to 20% of jobs disappearing at the combined entity.
Before Credit Suisse and UBS bankers panic, the potential merger is being portrayed as more whimsy than reality and was described as, "part of a regular thought-exercise on future strategic options," by 'people familiar with the matter' at UBS. The question of combining the two banks has cropped up regularly over the years. This time, however, it seems a bit more serious: the project has a name (Signal) and management consultants have been drafted in to work out how a deal might work.
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