June 25, 2012 / 5:52 PM / 7 years ago

Credit Suisse to make heavy job cuts in Europe: sources

LONDON (Reuters) - Swiss bank Credit Suisse CSGN.VX is to cut senior staff in its European investment banking department by up to a third, three sources familiar with the matter said, as tighter regulation and weak markets hit the sector.

A logo is seen in front of a Credit Suisse building in Zurich, May 4, 2012. REUTERS/Christian Hartmann

“In the European investment banking business, they are going to get rid of 60 directors and managing directors,” one source said on Monday.

The investment banking department affected advises on mergers and acquisitions, stock market listings, financing and debt issues, as opposed to other areas of the broader investment bank that focus on securities trading.

“It is about a third of the directors and 10-15 percent of the MDs,” the first source said, referring to what are typically two most senior job ranks in the banking world.

The layoffs would happen in July, this person said. The formal redundancy process can last several months.

A second source said the cuts could end up affecting 20-30 percent of senior investment banking staff in Europe.

Credit Suisse declined to comment.

Other major investment banks have begun cutting jobs after a rough second quarter, or are still carrying out layoffs due from last year even as further needs for cost-cutting loom.

Several global banks have axed at least 50 people in Asia in the past three weeks, and more are on the way.

Credit Suisse announced a plan last year to cut about 3,500 jobs worldwide and eliminate $2.1 billion in annual costs by the end of 2013 across its three major divisions of private banking, asset management and investment banking.

It is still working through those redundancies, having made around 2,000 of the cuts by the first quarter of 2012. In all, it is shedding about 7 percent of its workforce, and the latest round comes under that target.

Like many rivals hit by rocky markets, Credit Suisse has also been cutting jobs in bond and stock trading, two sources said, though this latest round was primarily targeted at the advisory and financing business.

“It will be much less severe in the U.S. and Asia. It is principally Europe,” the first person said. “It will be primarily in London, but obviously spread across the zone.”

The bank, recently told to bolster its capital, is also planning to fire 126 employees in the New York area by August 6. These cuts come on top of 109 people sacked there earlier this year.

This month, chief executive Brady Dougan told a newspaper he was not planning to issue new shares after the Swiss central bank called on the bank to improve its capital base.

The spat - followed by a three-notch cut in its credit rating by Moody’s - led to speculation Dougan’s future at the bank was in doubt, though the board has since come out to back Dougan, who is American.

Editing by Dan Lalor

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