The government of Switzerland is trying to ease public concern about the possible layoffs
Switzerland’s financial capital is preparing to face the biggest wave of job loss this year since the collapse of Credit Suisse in March. The government interfered and rescued the bank in March by merging it with UBS, Credit Suisse’s rival, and thousands of jobs are expected to go on a whim. This could, in turn, affect the economy grimly. UBS expects to provide more details regarding its future plans by the end of this month.
According to the reports received from inside information and expert opinions, UBS, noting its savings target and other factors, is expected to cut around 30,000-35,000 of the joint workforce. In Switzerland, around 10,000 jobs could be affected by the absorption process. This whole process would be a big setback for the Switzerland finance sector since the 2008 financial crisis. During that time, UBS had to be saved by the government.
Credit Suisse and UBS did lay off thousands of employees and the Switzerland economy shrank by 2.3% in 2009. With a national unemployment rate of 1.9% and 1.6% in Zurich, it is safe to say that Switzerland’s economy is in much better shape now. Zurich’s rate could be seen as one of the lowest in Europe.
Since the conditions are good, the economy also creates good job prospects for some finance sectors. Headhunter Fredy Hausammann, who leads the Swiss arm of Amrop Executive Search stated that Switzerland can easily absorb a number of laid-off people from the merged bank over the next 36 months.
“In Switzerland, in the financial services industry there is a shortage of qualified staff across many disciplines,” added Hausammann. Fredy Hausammann thinks that it could be a hard task to let go of people in the top management, such as senior and managing directors, to find a good position to fit somewhere else.
The job cuts that will happen at Credit Suisse will affect Swiss and foreign nationals which could result in these employees leaving the nation if they are unemployed. The big players in the financial sector are also cutting jobs, especially in the Capital Market business.
Trying to ease the tension
The government of Switzerland is trying to ease public concern about the possible layoffs. A spokesperson for the State Secretariat for Economic Affairs mentioned that the economy would be able to absorb the mass layoffs due to a shortage of labour in all sectors, Reuters reported. Adecco, the Swiss staffing company, mentions that the demand for people working in the financial sector including finance analysts, accountants, controllers, etc. remains strong and it has increased by 7% this year.
According to the reports of Arbeitgeber Banker, there were more than 6,000 job openings in the Swiss financial sector at the end of June. The job positions that are automated such as bank office roles may take more effort to fill. Some associations had demanded earlier that UBC freeze their layoffs at least until the end of 2023.
Chief Executive Sergio Ermotti stated that around June nearly 10% of the workers had already left and it is quite clear that the staff are already looking for other opportunities. Many Swiss banks are actively searching for opportunities, particularly for relationship managers with solid books and strong client relationships. Chief Executive of EFG Giorgio Pradelli stated that the Swiss private bank was hiring across geographies and functions and utilizing the talent on the market. He also added that EFG had already exceeded its aim of hiring nearly 70 client relationship officers this year and that he expected it to triple by the end of 2023.