Big banks around the globe are cutting down on operating costs and thousands of jobs are set to be eliminated. Is Switzerland going to be spared?
Banks worldwide have announced the reduction of 70,000 jobs so far this year. Ninety percent of the cost cuts are due in European banking, according to «Bloomberg» (behind paywall), a percentage that increased dramatically with the recent measures said to be announced soon by HSBC.
The Biggest Cuts
- The Anglo-Chinese giant is about to cut an additional 10,000 jobs, according to a report in yesterday’s «Financial Times» (finews.com reported).
- Deutsche Bank will shed 18,000 jobs as part of its turnaround.
- Commerzbank, also in Germany, may reduce its headcount by 4,300 to reposition the business. It also announced that it will part with the online division Comdirect.
- Barclays has eliminated 3,000 jobs in the second quarter. It will continue to make cost savings.
- Société Générale in France is about to cut 1,600 jobs.
A Toxic Blend of Problems
Low (or negative) interest rates, challenging markets and investors that are holding back on placing their assets are combining with new regulation to make life tough for the European banks. All the while, the U.S. rivals are surging ahead, posting their biggest profits since the financial crisis in the first half of 2019.
The difficulties besetting European banking also affect the big Swiss banks, UBS and Credit Suisse. Neither has so far gone public with any major job cut plan. It would be surprising if Swiss banking were to escape the major trend in European banking however.
