UBS is contemplating the possibility of eliminating tens of thousands of positions in the wake of its emergency acquisition of Credit Suisse. The Swiss bank is currently leaning towards retaining the domestic operations of its struggling counterpart.

As per Reuters report, UBS is considering the potential reduction of approximately 30% from its combined workforce, which has grown to 120,000 following the state-brokered rescue earlier this year.

The bloodletting resulting from the job cuts will primarily impact Credit Suisse's investment bank, back office, and Swiss retail bank. According to the source, at least 7,000 jobs are expected to be eliminated in Zurich alone.

These plans suggest that UBS intends to incorporate Credit Suisse's domestic business into its own operations, aiming to streamline processes and reduce expenses. However, this decision may raise concerns about UBS's potential dominance in the domestic market, making it a controversial move.

According to the source, relationship managers responsible for managing significant client accounts, along with corporate bankers in Switzerland, are expected to face less impact from the workforce reduction.

If carried out, the proposed job cuts would exceed 30,000 in total. Bloomberg News reported on Tuesday that the overall number of job losses could potentially reach 35,000.

While the Swiss Bank Employees Association refrained from commenting on the specific figures mentioned in the report, it reiterated its concern regarding the potential impact of the bank's plans.

"The major changes in the financial center would change the face of Switzerland," it said in a written response to a Reuters request for comment.

The association expressed its growing concerns and frustrations after a period of over three months, emphasizing that media reports have contributed to this sentiment. Furthermore, the association urged UBS to collaborate with its social partners in order to find solutions that would safeguard financial market stability.

Previously, the staff association had explicitly requested UBS to minimize job cuts to the utmost extent possible.

Earlier this month, UBS Chief Executive Sergio Ermotti cautioned that difficult decisions regarding job cuts would need to be made in the aftermath of the Credit Suisse takeover. However, he did not disclose any specific figures at that time.

Last week, Reuters reported that UBS is planning to eliminate investment banking positions in Asia at Credit Suisse during the upcoming month. The reductions are expected to be particularly significant among investment bankers responsible for Australia and China.

In June, UBS successfully finalized its emergency acquisition of troubled competitor Credit Suisse, creating a Swiss banking and wealth management powerhouse. With a balance sheet of $1.6 trillion and oversight of over $5 trillion in assets, the combined entity solidified its position in the industry.