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UBS to Cut 3,000 Jobs in Switzerland for $10B Cost Reduction
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UBS Group AG (UBS - Free Report) is expected to cut around 3,000 jobs in Switzerland in the upcoming period. It had been planning on workforce reduction at Credit Suisse post its acquisition in order to save costs. The company expects that during the integration of Credit Suisse more staff would leave on their own accord.
Such job cuts are being planned by UBS as it aims to achieve gross cost reductions of more than $10 billion by the end of 2026.
Of the total layoffs, 1,000 employee reductions will be initiated in the later part of 2024. In an attempt to restructure Credit Suisse, the 2,000 staff redundancies will take place.
Notably, UBS Group AG completed the acquisition of Credit Suisse in an all-share deal on Jun 12, 2023. UBS aims to substantially complete the integration process by the end of 2026. Cumulative integration-related expenses are expected to be broadly offset by accretion-to-par effects of approximately $12 billion related to fair value adjustments applied to amortized-cost financial instruments.
However, since UBS’ emergency takeover of Credit Suisse, it has been facing legal hassles and operational challenges. The company has been facing class action suits and complaints from individual shareholders and former employees of Credit Suisse over an inadequate consideration of the latter.
Also, the acquisition of Credit Suisse has attracted its litigation portfolio. Per a Bloomberg article that cited people with knowledge of the matter, UBS is likely to face millions of dollars in regulatory fines over Credit Suisse’s dealings with Archegos Capital Management.
Nonetheless, management believes that full integration of Credit Suisse will be the most beneficial option for the company in the upcoming period.
UBS Group AG’s shares have gained 24.5% on NYSE over the past six months against the industry’s decline of 1.8%.
Image Source: Zacks Investment Research
UBS sports a Zacks Rank #1 (Strong Buy) at present.
The Charles Schwab Corporation (SCHW - Free Report) has also been taking similar steps to reduce costs.
Earlier this month, SCHW announced a business streamlining plan as part of its cost-saving measures. Per the filing with Securities and Exchange Commission, the company will slash jobs and close or downsize its corporate offices with an aim to achieve at least $500 million in annual cost savings.
In addition to cost efficiencies associated with the integration of TD Ameritrade (acquired by Schwab in October 2020), the above-mentioned action is a step taken to simplify its business to better prepare for the post-integration period.
Another stock sporting a Zacks Rank #1 at present from the same industry is BBVA USA Bancshares, Inc. (BBVA - Free Report) . Its 2023 earnings estimate has been revised 4.4% upward over the past week. Its shares have gained 13.4% in the past three months.You can see the complete list of today’s Zacks #1 Rank stocks here.
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UBS to Cut 3,000 Jobs in Switzerland for $10B Cost Reduction
UBS Group AG (UBS - Free Report) is expected to cut around 3,000 jobs in Switzerland in the upcoming period. It had been planning on workforce reduction at Credit Suisse post its acquisition in order to save costs. The company expects that during the integration of Credit Suisse more staff would leave on their own accord.
Such job cuts are being planned by UBS as it aims to achieve gross cost reductions of more than $10 billion by the end of 2026.
Of the total layoffs, 1,000 employee reductions will be initiated in the later part of 2024. In an attempt to restructure Credit Suisse, the 2,000 staff redundancies will take place.
Notably, UBS Group AG completed the acquisition of Credit Suisse in an all-share deal on Jun 12, 2023. UBS aims to substantially complete the integration process by the end of 2026. Cumulative integration-related expenses are expected to be broadly offset by accretion-to-par effects of approximately $12 billion related to fair value adjustments applied to amortized-cost financial instruments.
However, since UBS’ emergency takeover of Credit Suisse, it has been facing legal hassles and operational challenges. The company has been facing class action suits and complaints from individual shareholders and former employees of Credit Suisse over an inadequate consideration of the latter.
Also, the acquisition of Credit Suisse has attracted its litigation portfolio. Per a Bloomberg article that cited people with knowledge of the matter, UBS is likely to face millions of dollars in regulatory fines over Credit Suisse’s dealings with Archegos Capital Management.
Nonetheless, management believes that full integration of Credit Suisse will be the most beneficial option for the company in the upcoming period.
UBS Group AG’s shares have gained 24.5% on NYSE over the past six months against the industry’s decline of 1.8%.
Image Source: Zacks Investment Research
UBS sports a Zacks Rank #1 (Strong Buy) at present.
The Charles Schwab Corporation (SCHW - Free Report) has also been taking similar steps to reduce costs.
Earlier this month, SCHW announced a business streamlining plan as part of its cost-saving measures. Per the filing with Securities and Exchange Commission, the company will slash jobs and close or downsize its corporate offices with an aim to achieve at least $500 million in annual cost savings.
In addition to cost efficiencies associated with the integration of TD Ameritrade (acquired by Schwab in October 2020), the above-mentioned action is a step taken to simplify its business to better prepare for the post-integration period.
Another stock sporting a Zacks Rank #1 at present from the same industry is BBVA USA Bancshares, Inc. (BBVA - Free Report) . Its 2023 earnings estimate has been revised 4.4% upward over the past week. Its shares have gained 13.4% in the past three months.You can see the complete list of today’s Zacks #1 Rank stocks here.