December 2, 2008 / 7:26 AM / 11 years ago

Crisis prompts Credit Suisse and HSBC to axe UK jobs

ZURICH (Reuters) - European bank heavyweights Credit Suisse AG CSGN.VX and HSBC Holdings Plc (HSBA.L) are axing hundreds of jobs in Britain as the biggest financial crisis since the Great Depression bites.

A picture shows the logo of the Credit Suisse bank next to a Swiss flag in Lucerne February 19, 2008. REUTERS/Michael Buholzer

The cuts are the latest in a wave of job losses in which over 100,000 jobs have been axed at major global financial institutions since September. Of these, more than 50,000 were at U.S. bank Citigroup (C.N), which has made more write-downs than any other bank in the world in the crisis.

Switzerland-based Credit Suisse said on Tuesday it was cutting 650 jobs in the United Kingdom, equivalent to roughly 3 percent of its investment banking workforce of about 21,300.

“Due to market conditions and projected staffing levels required to meet client needs, we are reducing headcount by approximately 650 in the United Kingdom,” Credit Suisse spokesman Marc Dosch said.

“The cuts will be made mainly in investment banking,”

The bank, which employed around 50,000 people globally at the end of September, has already slashed 1,800 jobs this year, nearly all at its investment banking division.

Britain’s HSBC, Europe’s biggest bank, said it was cutting 500 jobs at its UK banking business following a review of the business. HSBC, which employs 58,000 people in Britain, had slashed 1,100 investment banking jobs in September.

“We deeply regret taking this step, but we consider it essential to ensure our business is operating as efficiently as possible and that we are best placed to deal with the economic downturn and maintain our levels of customer service,” HSBC UK Managing Director Paul Thurston said.

Shares in Credit Suisse were some 1 percent higher at 6:43 a.m. EST and HSBC shares were down 1.5 percent, against a 0.1 percent rise in the DJ Stoxx European banking index. .SX7P


Losses at Credit Suisse’s investment banking division dragged the Swiss bank into a loss in the third quarter and analysts expect the fourth quarter to be another difficult one.

“These announcements that we had might be a reaction to a very difficult fourth quarter and also a different view on what the next year may bring,” said ZKB bank analyst Andreas Venditti, who expects Credit Suisse to post another loss.

Credit Suisse had already cut 500 jobs in investment banking in October. Direct competitor UBS UBSN.VX, whose foray into risky U.S. assets has cost it $49 billion in write-downs, announced in October it would get rid of nearly 2,000 jobs.

Credit Suisse’s spokesman Dosch did not comment on which specific jobs would be shed nor the time frame for the measures.

“However, usually these cuts are made very fast,” he said.

Other leading banks have had to shrink their workforce in the last quarter as the financial crisis deepened and major economies were predicted to fall into an economic recession.

Britain’s Royal Bank of Scotland (RBS.L) is considering cutting 3,000 jobs in its investing banking arm, a person familiar with the situation told Reuters earlier this month.

Britain’s Barclays (BARC.L) is also expected to cut about 3,000 jobs as it integrates Lehman’s North American investment banking and capital market business, a source close to the British bank said in October.

In Germany, Commerzbank (CBKG.DE) announced in September 9,000 job cuts after buying Dresdner Bank while rival Deutsche Bank (DBKGn.DE) is expected to axe 900 jobs, a source with knowledge of the plan told Reuters last month.

Small UK lender London Scottish Bank LSB.L went into administration on Monday after failing to plug a gap in its capital reserves, putting 700 jobs in danger at the Manchester-based company.

Additional reporting by Andrew Thompson and Katie Reid in Zurich, Steve Slater in London and Ian Simpson in Milan; Editing by Victoria Bryan and Elaine Hardcastle

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