Starting next month, UBS Group AG intends to implement a substantial workforce reduction at Credit Suisse Group AG, surpassing 50% of its employees. This decision comes in the wake of an emergency takeover of the bank by UBS.

According to Bloomberg, the impact of the cuts is expected to fall heavily on bankers, traders, and support staff within Credit Suisse's investment bank, particularly those based in London, New York, and certain regions of Asia. Almost all activities within the bank are at risk due to the impending cuts.

Unnamed sources have revealed that employees have been informed about the likelihood of three rounds of cuts taking place this year. The first round is anticipated to occur by the end of July, followed by two additional rounds tentatively scheduled for September and October. As these plans have not been made public, the individuals providing this information requested to remain anonymous.

As the three-month mark since UBS's acquisition of Credit Suisse through a government-brokered rescue approaches, the magnitude of the impending job cuts is beginning to emerge. UBS, whose total workforce surged to approximately 120,000 following the completion of the deal, has expressed its intention to achieve savings of around $6 billion in staff expenses over the upcoming years.

According to two sources, UBS plans to achieve a significant reduction in its total combined headcount, aiming to reduce it by approximately 30% or 35,000 individuals. This figure aligns closely with the estimated overall reduction of around 30,000 predicted by analysts at Redburn in their recent report on UBS.

The current headcount at Credit Suisse amounts to approximately 45,000 individuals.

The staff reduction at the Swiss lender will significantly exacerbate the already challenging year for job prospects in the global financial sector. This comes in the wake of major cuts announced by Wall Street investment banks, such as Morgan Stanley and Goldman Sachs Group Inc., who have also downsized their workforce by thousands of employees.

UBS's dominance within the combined firm is already evident in its executive ranks. Among the executive board members, there is just one individual from Credit Suisse, Ulrich Koerner, who continues to serve as the CEO of the acquired bank. Similarly, in the crucial wealth management unit, out of the more than two dozen leadership appointments, only five are from Credit Suisse.

During an event held in Zurich on Tuesday, UBS Chief Executive Officer Sergio Ermotti expressed satisfaction with the progress of the integration, stating that it was proceeding smoothly.

From the onset of the takeover, UBS made it clear that it plans to significantly reduce the size of Credit Suisse's struggling investment bank. The investment bank was responsible for the $5.5 billion loss incurred in the Archegos Capital Management scandal in 2021.

According to sources, UBS initially intended to retain the top 20 per cent of dealmakers, especially those specialising in the technology, media, and telecom sectors. However, many of the high-performing bankers have already left or been recruited by rival firms. Deutsche Bank AG, Jefferies Financial Group Inc., and Wells Fargo & Co. are among the competitors who have successfully attracted Credit Suisse employees in recent months.

UBS aims to retain the majority of Credit Suisse's private bankers, although a significant number have already departed. In the Asia Pacific region, UBS plans to retain several hundred private bankers from Credit Suisse, which would increase their total count to over 1,200, as per insiders who shared this information with Bloomberg earlier this month.

In one of the initial tangible indications of the merger's progress, certain private bankers based in Singapore are preparing to move to UBS's prominent offices near a prominent shopping district in the city-state. This relocation is expected to occur as early as next month.