Credit Suisse To Cut 6,500 Jobs After Loss
In a move to regain its strength in the banking industry after suffering a loss of 2.4 billion Swiss francs in 2016, Swiss banking giant Credit Suisse announced its plans to cut up to 6,500 jobs in 2017.
This is not the first time the Zurich-based lender culled its employees as it works toward its 2018 cost-cutting target.
In 2015, the giant bank implemented a massive layoff of 7,250 employees. Even so, Credit Suisse lost 2.9 billion Swiss francs ($2.9 billion) that year.
Credit Suisse bank is the second largest bank in Switzerland. It is a leading global private bank and wealth manager with unique investment banking capabilities
Blame Loss on Toxic Mortgages Settlement
The bulk of the loss resulted from a $2 billion settlement it made with U.S. Department of Justice.
Credit Suisse received notice from the Justice Department to pay a total of $5.3 billion to settle claims for packaging and selling sold toxic mortgages between 2005 and 2007.
Though the settlement was a big blow to the giant bank, the Bank CEO Tidjane Thiam said Tuesday that reaching the settlement removed a “major source of uncertainty for our future.”
Optimistic for the future of the Swiss bank amid the loss and coming layoffs of workers, “We believe we are well positioned to continue to make progress with our restructuring program in 2017 and 2018.”
Thiam was hired in 2015. The new CEO launched a major change and cost cutting program, focusing on wealth management and emerging markets.
What About Gains
Credit Suisse has gains too amid the losses for two consecutive years under the management of Tidjane Thiam. In fact, the company achieved 1.9 billion Francs ($1.9 billion) in savings in 2016. This is more than 500 million Francs ($500 million) above its target.
Aside from that, the bank’s stock climbed 3% following its earnings statement on Tuesday.
Recent report from Bloomberg also highlighted the positive impact of the Zurich-based firm for boosting senior Asia banker pay by up to 15 percent after the firm boosted advisory revenues in the region.