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Credit Suisse to cut 2,000 jobs

Redundancies to hit all areas of the business

Credit Suisse, the Swiss bank, has announced plans to cut 2,000 jobs, or four percent of its workforce, to save one billion Swiss francs (£766 million).

The bank is being forced to cut costs after reporting a 52 percent fall in net profit to CHF 768 million (£588 million) in the second quarter of 2011, compared with the same period last year. It did not give details on how many IT and back office jobs would be affected, but a spokesperson said that IT would be included.

The announcement comes the same week that UBS, another Swiss bank, revealed that it was to cut costs by up to CHF 2 billion (£1.5 billion), which would include also include significant job cuts.

"To position the group to perform well in the continued challenging market, a number of efficiency enhancements are being implemented that target CHF 1 billion in cost savings and resulting reductions in the expense run-rate during 2012.

"This programme includes targeted headcount reductions of approximately four percent of the total headcount [of around 50,700 people] across the group," Credit Suisse said in its results today.

Credit Suisse said it needed to make the cost savings by 2012 after a "below expectations" performance in its investment banking business.

"The strength of our business model is underscored by an underlying return on equity of 15 percent for the first half of 2011, despite a disappointing performance in the second quarter. Asset management showed a strong performance in the quarter, and private banking recorded solid results. However, our performance in investment banking was below our expectations," said CEO Brady Dougan.

The bank attributed its disappointing quarterly performance to a strong Swiss franc, a difficult trading environment and low levels of client activity.

Last year, Credit Suisse was on a staff hiring spree, increasing its workforce by 1,600, including IT staff, after turning in an increased profit.

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