Geneva: Thousands could lose their jobs in Switzerland following UBS's emergency takeover of its rival Credit Suisse, observers were cited as saying in the reports on Tuesday. Meanwhile, banking employees unions demanded rescue package for banking staff.
According to the NDTV report, Switzerland's biggest bank UBS taking over Suisse under pressure from Swiss authorities sent shockwaves through the nation which is renowned for its banks and financial sector.
The Swiss Trade Union Federation (SGB) in a statement issued on Tuesday said that directly or indirectly thousands of jobs are potentially threatened. Swiss Bank Employees Association (SBPV) also echoed a similar sentiment and added that the uncertainty Credit Suisse employees faced was extremely stressful.
UBS took over Credit Suisse after its share prices imploded
The $3.25 billion takeover was announced late on Sunday and was mediated by Swiss authorities to help prevent economic turmoil from spreading across the country and beyond after Credit Suisse's share price imploded following collapse of two American banks.
The two Swiss banking giants have around 120,000 staff members globally with 37,000 of those in Switzerland, cited the report. After the merger is completed, aspersions have been cast that many jobs will become redundant.
12,000 jobs could disappear, opine experts
The BAK Economics think-tank on Monday had warned that nearly 12,000 Swiss-based staff in the two giants stand to lose their jobs. Additionally, there will be consequences for external contractors and service firms, SGB spokesperson Benoit Gaillard was cited as saying in the report.
Reportedly, experts opined that the most jobs at risk are among Credit Suisse's staff and particularly 17,000 positions in Switzerland and an equal number in investment bank unit.
However, Stephane Garelli, an economics professor of International Institute for Management Development, was cited in the report saying that UBS staffers may be laid off if faced with two overlapping areas of responsibility. He said that the Swiss risk finding themselves in a market with many persons with financial expertise but no work.
The Ethos Foundation, representing pension funds in Switzerland and owns stakes in both banks, was cited to be pressing Swiss authorities and UBS to spin off Credit Suisse's domestic business which would make it possible to preserve jobs and maintain healthy competition which guarantees proper functioning of economy.
Experts demand Rescue plan
The Swiss unions were demanding that banks and governments launch broad 'rescue plan' for affected employees, stated the report.
The bank staff association said it initiated a taskforce including people from UBS and Credit Suisse and supported by government toward setting staff rescue package.
The unions are also calling for freeze on layoffs until end of 2023 and for the implementation of unavoidable layoffs as part of social plan.
Experts said that job loss from mega takeover will push labour market in big shock
The unions said that the takeover threatens to cut jobs on a scale big enough that labour market in the banking industry cannot absorb.
Additionally, to facilitate the mega-merger, the Swiss government granted UBS a guarantee of 9 billion Swiss Francs to assume potential losses arising from risky assets of Credit Suisse and central bank said it would provide liquidity of up to 100 billion Swiss francs.
Moreover, the SGB union stressed the government guarantee alone amounted to dishing out around 1,000 Swiss francs for all residents of Switzerland insisting the two banks have a responsibility to avoid brutal job cuts.
Credit Suisse staff should not pay fo errors committed by their authorities, said the union.
