Credit Suisse, which slashed 3500 jobs last year, plans to cut 30 percent jobs in European investment banking division. According to Mark Scott of New York Times, the layoffs will take place over the next 12 months and focus primarily on the advisory and capital markets businesses in Europe. The job reduction is a part of the bank’s restructuring plans.
“The prospect of layoffs in the bank’s European investment banking unit comes soon after Switzerland’s central bank said Credit Suisse needed to increase its capital this year to prepare for a potential worsening of the European debt crisis,” the NYTimes reported.
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Swiss National Bank said in its annual financial stability report that Credit Suisse Group AG (ADR) (NYSE:CS) needs to “significantly expand its loss-absorbing capital during the current year.” In response, Credit Suisse said it is steadily making progress towards increasing capital reserves. In its progress report, the bank stated to have laid off 2,000 employees by the first quarter of 2012.
“Job cuts will be much less severe in the U.S. and Asia. It is principally Europe,” a source said on condition of anonymity. “It will be primarily in London, but obviously spread across the zone.”
Tighter regulations and weak markets have crippled the financial sector in Europe. The total value of deals in European equity capital market has fallen almost 50 percent to $60.4 billion in the first half of 2012 from the same period in 2011.
Other European banking giants are also planning to cut jobs in response to slowdown in the European economy. UBS has already announced to eliminate 3,500 jobs. The French banks Crédit Agricole and Société Générale have also announced job cuts.