Credit Suisse to Cut 75 U.K. Jobs, Joining Barclays
Credit Suisse, Barclays to Cut U.K. Jobs as Revenue Slides
Charles Ellena/Bloomberg News
Pedestrians pass a Credit Suisse office in Bern, Switzerland.
Pedestrians pass a Credit Suisse office in Bern, Switzerland. Photographer: Charles Ellena/Bloomberg News
Credit Suisse Group AG, Switzerland’s second-biggest bank, and Barclays Plc began cutting jobs after reporting a slide in revenue this year.
Credit Suisse, based in Zurich, said in an e-mailed statement yesterday that the 75 reductions in its U.K. investment-banking unit will affect bankers and “certain support functions.” Barclays Capital, the investment-banking unit of Barclays, is eliminating about 300 administrative and support jobs, a person briefed on the matter said.
The moves may signal a reversal of recent hiring by investment banks after lackluster markets damped second-quarter revenue at firms from Goldman Sachs Group Inc. to JPMorgan Chase & Co. Credit Suisse’s investment bank last month posted a 21 percent decline in revenue from the first quarter, and Chief Executive Officer Brady Dougan described the economy and markets as “uncertain and challenging.”
Stocks plunged yesterday, sending the MSCI World Index to its biggest drop since June, on concern that the U.S. economic recovery is faltering. The Standard & Poor’s 500 Index has slumped 6.8 percent since the end of March after rising 4.9 percent in the first quarter and 23 percent in 2009. In Europe, the FTSE 100 Index is down 7.7 percent since the end of March, France’s CAC 40 Index has fallen 8.7 percent and the Euro Stoxx 50 Index down 7.1 percent.
‘Adjusting Capacity’
“We continue to be proactive about monitoring the size of our business relative to client opportunities and market conditions,” Credit Suisse said in the e-mail. “This involves both shifting resources to growth areas and adjusting capacity to meet client needs and to manage costs across the business.”
Credit Suisse’s investment bank had 20,600 employees worldwide at the end of the second quarter, up 3 percent from 20,000 at the end of March and up 9.6 percent from 18,800 a year earlier, according to the company’s latest quarterly report. It didn’t break out the number of U.K. employees.
Trading volumes dropped in the second quarter as clients reduced their activity, several banks said when they released results. Goldman Sachs Chief Financial Officer David Viniar told reporters on July 20 that the “environment is pretty slow out there” and he wasn’t sure what would change that.
Barclays may also eliminate 200 contractors, said the person briefed on the plans, adding investment-banking jobs wouldn’t be cut. A Barclays spokesman confirmed the bank started a review of its infrastructure function that will lead to job losses.
Barclays Capital, led by Robert Diamond, employed 25,500 people at the end of June, up 9.9 percent from the end of 2009 and up 16 percent from a year earlier, according to the firm’s first-half earnings. Revenue at the unit fell 32 percent in the period as income from rates and commodities dwindled.
To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net; Brett Foley in London at bfoley8@bloomberg.net.
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