Following its acquisition of competitor Credit Suisse, Switzerland’s UBS Group AG is reportedly implementing significant workforce reductions in the Asia-Pacific region. Several factors, including weak customer demand and concerns about China’s struggling economy, are driving these job cuts. The bank has already begun to lay off employees, with more reductions expected through November.
The role of relationship managers, particularly in Singapore and Hong Kong, is one of the key areas impacted by these layoffs. Many of these positions are part of teams that were recently acquired from Credit Suisse. While the exact number of job cuts is unknown, UBS has stated that it intends to reduce its workforce in these locations. For the time being, however, the bank intends to keep the majority of its private bankers in Australia and India.
The Asia-Pacific region has seen decreased consumer demand and activity levels, with Singapore and Hong Kong serving as traditional booking hubs for China’s affluent individuals. This drop in activity led to a 9% drop in profit before tax for UBS’ wealth-management division in the second quarter compared to the previous year.
UBS’s June acquisition of Credit Suisse came with lofty integration goals, including the elimination of 3,000 domestic jobs and cost savings totaling more than $10 billion.
Headcount reductions in Asia are consistent with moves made by other major banks such as Barclays and Goldman Sachs. For example, Barclays intends to cut 5% of client-facing employees in its trading sector globally. Despite earlier predictions of minor reductions in Asia, UBS is now implementing significant cuts, including the departure of senior bankers hired from Credit Suisse.