During the Covid pandemic, many banks ramped up hiring to manage the increase in trading and dealmaking. Now, as demand has slowed, they're having to letting many of those hires go.
Overall, Wall Street’s biggest employers have announced 11,000 job cuts this year and US banks have had to fork out as much as $1 billion in severance pay in the first half of 2023, the «FT» writes.
Goldman Sachs has spent $260 million after letting go of 3,400 employees, while Morgan Stanley paid $300 million related to 3,000 layoffs. Citigroup announced that costs for slashing 5,000 jobs amounted to $450 million, the paper writes.
Coronavirus Loan Scheme
In 2020 Swiss banks also increased hiring, partly because the Swiss government decided to grant coronavirus aid loans to companies and businesses via the existing network of banks. Banks also benefited from the easing of capitalization rules because of the crisis and the Swiss National Bank’s negative interest rates at the time.
Swiss Job Cuts Looming
There will be a big tab in Switzerland as well. The UBS takeover of Credit Suisse is expected to result in around 30,000 job cuts in three phases, as finews.com reported. Last month, UBS improved the terms of its social programs and aligned them with those of Credit Suisse, but it remains to be seen what the ultimate price tag of those job cuts, which are scheduled to come in three phases, will be.
