Credit Suisse Cuts 5,300 Jobs

By BETTINA WASSENER

Published: December 4, 2008

Credit Suisse announced Thursday it would cut 5,300 jobs — 11 percent of its global workforce and Nomura of Japan said that it planned 1,000 job cuts at its London office as the financial crisis and economic downturn intensifies.

The cuts add to the tens of thousands of job losses in the global financial sector in recent months as the crisis that began with U.S. subprime mortgage meltdown last year worsened.

Credit Suisse said in a statement in Zurich that it had losses of about 3 billion Swiss francs, or $2.5 billion, in October and November, and the job losses, most of which will be made in the first half of 2009, are designed to reduce costs by 2 billion francs. Most of the cuts will come at the ailing investment banking unit.

“In light of Credit Suisse’s 2008 performance to date,” the bank said in a statement, the bank’s chairman, chief executive officer and the head of its investment bank will forego bonuses this year.

Credit Suisse shares initially fell on the news, but were 1.2 percent higher by mid-morning. Its rival UBS, which has also announced job cuts, was 3.9 precent up. So far this year, the two banks’ shares are sharply lower, in line with banks around the globe. Credit Suisse has lost 59 percent since January 1, while UBS has slumped 69 percent.

Separately, Nomura, the Japanese bank that earlier this year bought the Asian, European and Middle Eastern operations of Lehman Brothers, whose collapse in mid-September triggered a dramatic escalation in the current crisis, announced it would eliminate 1,000 jobs in London.

That cut amounts to about one-fifth of the bank’s London workforce, and will also hit some former Lehman employees, Bloomberg News reported. Nomura last month had said it had no plans to slash jobs.

Others banks, like Goldman Sachs and JPMorgan have already announced significant layoffs, while Citigroup’s announcement that it would cut 52,000 jobs sent shock waves throughout the already shaken financial world last month.