Swiss banking giant UBS is preparing for a comprehensive round of job cuts due to the slower and more expensive than anticipated integration of Credit Suisse. Insider data shows that approximately 10,000 jobs are predicted to be cut by 2027, a substantial move in CEO Sergio Ermotti’s strategy to bridge the efficiency gap with worldwide competitors.
In line with internal statistics, the bank is anticipating approximately 10,000 job losses in the upcoming three years, impacting both Switzerland and international locations. UBS plans to minimize the reductions as much as possible, relying on natural attrition, early retirements, and internal mobility. However, large-scale layoffs seem inevitable, according to the bank.
If the planned downsizing goes ahead, UBS’s workforce is projected to decrease to around 95,000 full-time positions. The reduction has been noticeable since the commencement of Credit Suisse’s integration, plummeting from almost 120,000 employees in mid-2023 to roughly 104,000 positions by 2025, an average loss of more than 1,250 per quarter. Larger quarterly job cuts of up to 2,000 are now anticipated.
The integration process is lagging behind schedule. About 85 percent of clients have been migrated, but many large and convoluted accounts remain, demanding intensive manual labor. The longer Credit Suisse systems stay in operation, the more the cost burden increases.
UBS CEO Sergio Ermotti committed to savings of $13 billion and has so far achieved $10 billion. Nonetheless, the organization-wide cost-income ratio remains high at approximately 77 percent. In contrast, similar institutions operate far more efficiently, with Morgan Stanley at 67 percent, Société Générale at 61 percent, and Santander at just 41 percent.
UBS’s flagship global wealth management division appears to be a weak spot as costs remain stubbornly high, with a cost-income ratio close to 80 percent. Elevated compensation packages for client advisors, particularly in the U.S., significantly undermine the bank’s benchmark ambitions.
Despite persistent market uncertainty over future Swiss capital regulations, there are indications of potential improvements. There are reports that the Finance Ministry is considering easing requirements, which could bolster the bank’s valuation as it continues to undergo restructuring.
UBS is now faced with two critical tasks: delivering the promised synergies and regaining profitability momentum. The effectiveness of job cuts and system consolidation will be crucial in persuading the market that the Credit Suisse integration can ultimately generate shareholder value.
What are the expected job cuts at UBS?
Approximately 10,000 positions are expected to be eliminated by 2027.
What challenges is UBS facing with the integration of Credit Suisse?
The integration process is behind schedule and proving to be costlier than anticipated. Many large and complex accounts remain, requiring intensive manual work.
What is UBS’s current cost-income ratio and how does it compare to other institutions?
UBS’s cost-income ratio is approximately 77 percent. In comparison, Morgan Stanley operates at 67 percent, Société Générale at 61 percent, and Santander at just 41 percent.
