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Credit Suisse Set To Cut An Additional 2000 Jobs

Chief Executive of Credit Suisse Group AG, Tidjane Thiam who has barely stayed in office following his July appointment is now faced with the challenge of unsticking the company from high-risk bets that have been in the firm’s records without his knowledge.

Credit Suisse Set To Cut An Additional 2000 Jobs

Mr. Thiam is also grappling with the prospects of cutting thousands of jobs from a poorly performing trading unit.

In its fourth quarter, the firm’s investment bank recorded close to $1billion in written down assets. At the same time, investors have also cut down up to one-third of the value of the bank’s share prices in the three months since the start of the year.

The decision to make changes to the bank’s strategy follows Mr. Thiam’s vision for the bank following his appointment.

Speaking about Mr. Thiam’s strategy to tap shareholders for equity, Jonathan Fearon, investment director at Standard Life Europe said “A lot of investors were looking for to undertake this in October.”

The problems facing Credit Suisse are a reflection of the broader challenges facing some of the largest investment banks in Europe. Stringent capital requirements, depressed trade as well as the volatile markets plaguing Wall Street further compound the challenges.

Many European investment banks are currently under the leadership of new CEOs who have implemented broad strategies to reduce the risks faced by the banks.

In a statement this week, Credit Suisse said that its trading revenue would likely fall by up to 45% in this first quarter. The investment bank attributed this to lesser businesses from a client and to risky, illiquid positions.

At a press conference on Wednesday, Mr. Thiam made it clear that the accumulation of distressed loans all happened before he was appointed as CEO.

He admitted that the positions were increasingly problematic in recent years due to what he termed as ‘limits that keep moving.’

In a statement, the investment bank announced that it would cut 2,000 jobs, to bring the total of job losses to 6,000.

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