Oct. 28 (Bloomberg) -- Credit Suisse Group AG, Switzerland's second-biggest bank, plans to eliminate 500 jobs in its securities unit and some support functions, adding to 1,565 cuts announced over the past year.

The reductions are in response to ``market conditions and projected staffing levels required to meet client needs,'' said Karen Laureano-Rikardsen, a spokeswoman for the Zurich-based bank. The firm's securities unit employed 21,300 people at the end of September.

Chief Executive Officer Brady Dougan said last week the fourth quarter remained ``challenging'' after the bank reported its second quarterly loss this year on writedowns and failed trades. Banks and brokerages have already reported more than 148,000 job cuts and $680 billion of markdowns and credit losses.

``The difficult revenue picture further highlights the challenges Credit Suisse and the rest of the industry face in flexing costs down in this environment,'' Citigroup Inc. analysts led by Jeremy Sigee said in a note on Oct. 24.

Swiss rival UBS AG, which had the biggest losses from the subprime crisis of any European bank, said earlier this month it will cut 2,000 more jobs at the investment bank, following 7,000 staff reductions already announced in the past year.

Credit Suisse said last week that 1.7 billion Swiss francs ($1.5 billion) of losses on buying and selling securities of financial institutions, convertible bonds, and on certain proprietary trading strategies contributed to its third-quarter net loss of 1.26 billion francs.

Writedowns

The securities unit had a pretax loss of 3.23 billion francs after writedowns of 2.43 billion francs on leveraged finance and structured products, as well as 922 million francs on corporate loans. Losses were cushioned by gains of 1.88 billion francs the bank booked on its own debt.

Credit Suisse has been cutting jobs in areas such as residential mortgage-backed securities, collateralized debt obligations and commercial mortgage-backed securities, where headcount dropped by 68 percent, 52 percent and 40 percent, respectively, in the year that ended in June.

Over the same period, the bank hired in businesses such as commodities, where it added 57 percent to headcount, equity derivatives with 27 percent of additions and prime services, which got 12 percent more people.

Credit Suisse added a net 800 people at the securities unit in the third quarter, with about half in information technology and other ``support'' functions for client-driven businesses, Paul Calello, the head of the investment bank, said last week.

To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net; Christine Harper in New York at charper@bloomberg.net.

Last Updated: October 28, 2008 12:45 EDT