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Layoffs: Credit Suisse to cut 9,000 jobs, projects $1.6 billion loss in fourth quarter

Layoffs: Credit Suisse to cut 9,000 jobs, projects $1.6 billion loss in fourth quarter

Layoffs: Credit Suisse to cut 9,000 jobs, projects $1.6 billion loss in fourth quarter
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By Nishtha Pandey  Nov 23, 2022 4:51:18 PM IST (Updated)

According to the bank, the sale of its shares in British wealth tech platform Allfunds group will result in a loss of 75 million Swiss francs in the fourth quarter. The bank expects its wealth management division to suffer a loss due to lower deposits and assets under management.

The looming recession and the ongoing wave of layoffs has hit the banking sector, with Credit Suisse saying on Wednesday that it projects a 1.5 billion Swiss franc ($1.6 billion) loss in the fourth-quarter due to subdued client activity in the wealth management and Swiss bank division. In a bid to cut costs, the bank started slashing 2,700 jobs in the fourth quarter and plans to eliminate around 9,000 positions by 2025, reported Bloomberg.

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“These decisive measures are expected to result in a radical restructuring of the Investment Bank, an accelerated cost transformation, and strengthened and reallocated capital, each of which are progressing at pace,” the bank said in a market update on Wednesday.
Now, coming to how the layoffs will happen, the bank mentioned that a number of factors will influence the actual results, including remaining performance for the rest of the year, continued exits of non-core positions, goodwill impairments, and other asset sales.
In the fourth quarter, the bank expects a loss of 75 million Swiss francs due to the sale of its shareholding in British wealth tech platform Allfunds group. As a result of lower deposits and reduced assets under management, net interest income, recurring commissions and fees are expected to decline, resulting in a loss for the wealth management division, the bank said.
“Together with the adverse revenue impact from the previously disclosed exit from the non-core businesses and exposures, and as previously announced on October 27, 2022, Credit Suisse would expect the Investment Bank and the Group to report a substantial loss before taxes in the fourth quarter 2022, of up to CHF ~1.5 billion for the Group,” the bank said.
Meanwhile, Credit Suisse will be holding an extraordinary general meeting on Wednesday, at which shareholders will vote on the group’s restructuring plans and capital raising proposals.
Big firms are already battling the wrath of recession with layoffs becoming everyday news. Just yesterday, news surfaced that Google's parent company Alphabet is looking to fire nearly 10,000 employees starting early 2023 as it has begun spotting ‘low performing’ staff using a new performance management system. Twitter, Meta, Microsoft, and Amazon have already begun letting go of thousands of employees.
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