Credit Suisse is considering 5,000 job cuts as part of a broader restructuring plan meant to solidify the bank’s pivot towards wealth management after a string of scandals at its investment bank.
Speculation over the scale of the job cuts has swirled since Credit Suisse unexpectedly replaced its chief executive Thomas Gottstein in July, after a tumultuous two-year tenure beset by financial losses, controversies and high-profile lawsuits.
The Swiss banking group’s new boss, Ulrich Körner, has been tasked with spearheading the bank’s overhaul, which will involve scaling back the investment bank and cutting more than $1bn in costs.
Credit Suisse could end up cutting 5,000 jobs as part of those efforts, according to Reuters, which cited a source with knowledge of the matter. The report came as the Credit Suisse board met in Singapore this week, with directors expected to discuss restructuring plans before a shareholder update scheduled for late October.
“We have said we will update on progress on our comprehensive strategy review when we announce our third-quarter earnings; any reporting on potential outcomes before then is entirely speculative,” Credit Suisse said in a statement.
The lender’s restructuring plans are part of efforts to draw a line under a string of scandals that have primarily involved its investment bank, having been embroiled in the collapse of the controversial lender Greensill Capital and the US hedge fund Archegos Capital in 2021.
The lender also admitted last year it had defrauded investors as part of the historical Mozambique “tuna bonds” loan scandal, resulting in a fine worth more than £350m.
However, the bank’s wealth management division also came under pressure in February this year after the publication of the Suisse secrets investigation, conducted by a consortium of journalists including the Guardian, which exposed the hidden wealth of clients at the bank involved in torture, drug trafficking, money laundering, corruption and other serious crimes over decades.
Credit Suisse has since become the first big Swiss bank to be charged with criminal offences in its home country, after it was found guilty of helping launder money on behalf of the Bulgarian mafia. The bank has denied wrongdoing and said it will appeal against the ruling.
The lender also lost its chair António Horta-Osório less than a year into his tenure in January, after he resigned because of Covid regulation breaches.
