Credit Suisse to Cut 5,300 Jobs After Loss in October

By Elena Logutenkova and Christian Baumgaertel

Dec. 4 (Bloomberg) -- Credit Suisse Group AG, Switzerland’s second-largest bank, said it will cut 5,300 jobs, or 11 percent of its workforce, after losses of about 3 billion francs ($2.5 billion) in the first two months of this quarter.

Some 3,800 reductions will be at the investment bank, bringing headcount at the unit to 17,500, the Zurich-based bank said today. The job cuts will contribute to about 2 billion francs in savings, Credit Suisse said.

“These actions will better position us to weather the continuing challenging market conditions,” Chief Executive Officer Brady Dougan, 49, said in the statement.

Dougan, Chairman Walter Kielholz and Paul Calello, head of the investment bank, agreed to forgo bonuses for 2008 after about 5.2 billion francs in net losses so far this year. Banks and insurers worldwide have reported about 200,000 job cuts and more than $970 billion in losses since the global financial crisis began, Bloomberg data show.

Credit Suisse fell 1.14 francs, or 4.1 percent, to 26.56 francs by 9:04 a.m. in Zurich, bringing losses this year to 61 percent. Cross-town rival UBS AG, Switzerland’s largest bank and the lender with the highest losses in Europe from the credit crisis, has dropped 70 percent over the period.

Today’s announcement brings the total number of job cuts at Credit Suisse to 7,390, compared with 9,000 at UBS. UBS in October agreed to a $59.2 billion aid package from the Swiss government and the central bank to relieve it of risky assets, while Credit Suisse declined assistance.

Nomura

Nomura Holdings Inc. is firing as many as 1,000 employees in London, after worsening financial markets and costs related to buying parts of Lehman Brothers Holdings Inc. pushed the shares to a 26-year low.

Credit Suisse’s investment bank will reduce the scale of operations in complex products and exit some proprietary trading. The unit had a “significant” pretax loss in October and November as it cut risks in “challenging” markets, Credit Suisse said.

“Investment banking will remain a valuable contributor to the integrated bank with lower volatility and attractive risk returns,” Credit Suisse said in a statement.

The majority of job cuts will be implemented by the end of June 2009. The bank will take a charge of 900 million francs for the reorganization measures, mostly in the fourth quarter, which isn’t yet reflected in the net loss estimate.

Credit Suisse Group had a “modest” profit in November, it said.

The bank will “judiciously invest in the growth of private banking globally,” Dougan said. The business hired 370 new client advisers by the end of November, more than the targeted 330 for 2008, and had “solid” new asset inflows so far, Credit Suisse said.

To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net