The number of unemployed bankers in Switzerland has reached a record. The traditional cities of white-collar business have been hit hard by the development and will need to brace for worse to come.

Switzerland, the banking headquarter of Europe, has never had as many unemployed bankers as today, «Sonntagsblick» newspaper reported, citing statistics by the department of labor in the region of Zurich.

Zurich and Geneva Hit Hardest

In January of this year, the region's labor office counted 675 unemployed bankers – substantially more than during the financial crisis even. In 2009 and 2010, Zurich had fewer than 600 unemployed bankers.

Geneva, the second big financial center of Switzerland, counted 127 unemployed bankers in January, more than double the number of 2004 for example.

Moving Out of Switzerland

Experts last year warned that unemployment would rise in the industry as banks were forced to cut costs amid dwindling margins and following the end of the offshore banking business that Switzerland had benefited from

Companies such as UBS and Credit Suisse, Switzerland’s big two, have already relocated back-office jobs to countries such as Poland or Ireland as they attempt to reduce the costs for the back-office operations.

Relocating Within Switzerland

The big banking centers, primarily Zurich and Geneva, also stand to lose out as banks are moving jobs to cheaper places within Switzerland. UBS for instance is planning to relocate as many as 1,000 jobs to places such as Biel or Solothurn, small cities with lower labor costs and cheaper real-estate than financial powerhouses such as Zurich and Geneva, which boast some of the highest prices in the world.

Axel Lehmann, chief operating officer at UBS, told «NZZ am Sonntag» (behind paywall) that the bank was planning to establish one or two additional regional centers for back-office, IT and support services. Switzerland’s biggest bank already announced the construction of one such center, in Schaffhausen, along the border with Germany, where it will employ some 500 people.

Lehmann said that the bank achieved cost savings of as much as 20 percent by relocating back-office jobs to lower-cost centers in the periphery.