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UBS plans to eliminate around 3,000 jobs in Switzerland to cut costs by $10 billion following its acquisition of Credit Suisse.
These job cuts represent about eight percent of the combined workforce of both banks in Switzerland.
UBS reported a record net profit of $29 billion for the second quarter.
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However, analysts have noted the extraordinary profit largely stemmed from an accounting technicality related to the takeover.
Excluding this gain, UBS posted a pre-tax profit of $1.1 billion for the quarter.
The decision to slash jobs in Switzerland may generate further controversy in the country.
The Credit Suisse acquisition has already faced public and political opposition.
The Swiss Bank Employees Association has called for fair treatment of the 37,000 employees from both institutions during the integration process.
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UBS CEO Sergio Ermotti said: “Every lost job is painful for us. Unfortunately, in this situation, cuts were unavoidable.”
He said the bank would offer affected employees financial support, outplacement services, and retraining opportunities.
Although UBS didn’t provide specific details about layoffs outside of Switzerland, Ermotti said more employees might resign or retire.
The bank is also planning to downsize outside Switzerland to achieve its cost-saving targets, along with a reduction in reliance on external contractors.
Additionally, UBS confirmed its decision to fully integrate Credit Suisse's banking operations in Switzerland into the merged group rather than opting for a spinoff or IPO.
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While this choice resulted in 400 more redundancies, the bank believes it is the best outcome for UBS, stakeholders, and the Swiss economy.
UBS aims to achieve over $10 billion in savings from the integration by the end of 2026, a year earlier than initially planned when the takeover was announced in March.
The acquisition of Credit Suisse by UBS was orchestrated by Swiss authorities in March to prevent a banking sector crisis.
Credit Suisse faced financial troubles due to a loss of confidence, compliance issues, and client withdrawals.
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This merger has sparked controversy in Switzerland, leaving the country with a single massive financial institution with significant market share and assets.
UBS recently announced it would no longer require a Swiss government guarantee for potential losses from Credit Suisse assets.
It alleviates taxpayers' potential risks associated with the deal.
UBS and Credit Suisse will continue to operate under separate brands until at least the end of 2024.
There’s a possibility of selectively using the Credit Suisse brand even after full integration.
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