After acquiring its struggling rival Credit Suisse, UBS announced on Thursday that it will eliminate 3,000 positions in Switzerland alone as part of a more than $10 billion cost-cutting programme.

The newly formed bank giant’s intention to eliminate one in every twelve Swiss positions provides a sense of the magnitude of the restructuring as UBS struggles to merge a rival that collapsed after terrified customers withdrew billions from their accounts.

The majority of savings are anticipated to come from personnel reductions, and analysts predict that between 30,000 and 35,000 jobs might be lost internationally.

The earliest layoffs come after the largest wealth manager in the world chose to absorb Credit Suisse’s local branch, which was its only successful section last year, rather than split it off, as UBS also thought about doing.

“Our analysis clearly shows that a full integration is the best outcome for UBS … and the Swiss economy,” UBS Chief Executive Sergio Ermotti said.

3,000 Swiss positions would be lost, according to a memo from Ermotti to the workforce, although more workers would leave on their own volition, perhaps through retirement. Credit Suisse has previously reported that 8,000 individuals left the bank in recent months, before to Thursday’s cutbacks, so the actual number could be far higher.

In contrast to an earlier estimate of $8 billion by 2027, the UBS forecast more than $10 billion in cost reductions by the end of 2026.

The cuts were disclosed alongside the first financial figures the bank has published since the takeover, hastily arranged over a weekend in March. UBS shares were up 6% in late afternoon trade, reaching highs not seen since 2008.

UBS, which has a market value of 77 billion Swiss francs, also expressed optimism about its near-term prospects. Rich clients’ attitudes are improving, and the firm anticipates that better financial markets will increase the amount of fees it charges.

However, there is controversy in Switzerland over the choice to incorporate Credit Suisse’s local unit. Swiss pension funds and foundations that owned stock in both banks, represented by proxy adviser Ethos, said that a spinoff would have prevented “a major systemic risk for Switzerland, an important negative impact on employment, and issues for the fair competition.”

Ethos has supported a class-action lawsuit that is suing UBS for the buyout at a lower price.

Fewer employment would have been lost if Credit Suisse in Switzerland had remained independent and whole, as some politicians had hoped.

A firm whose assets surpass the country’s economic output was created by the largest bank merger since the global financial crisis, which was organised by the Swiss government to prevent Credit Suisse’s collapse. The country’s regulators had already struggled to oversee major bankers.

Although Switzerland provided guarantees and cash from the central bank to finance the rescue, UBS has already stopped receiving backing from the government, giving its politicians little clout to stop the cull before the elections.

Zurich, the financial hub of Switzerland, where banks rule the landscape, would suffer from the cuts.

Fewer employment would have been lost if Credit Suisse in Switzerland had remained independent and whole, as some politicians had hoped.

A firm whose assets surpass the country’s economic output was created by the largest bank merger since the global financial crisis, which was organised by the Swiss government to prevent Credit Suisse’s collapse. The country’s regulators had already struggled to oversee major bankers.

Although Switzerland provided guarantees and cash from the central bank to finance the rescue, UBS has already stopped receiving backing from the government, giving its politicians little clout to stop the cull before the elections.

Zurich, the financial hub of Switzerland, where banks rule the landscape, would suffer from the cuts.Credit Suisse’s second quarter net asset outflows of 39 billion Swiss francs ($44.4 billion) show that the rescue effort has not been able to stop the decline in confidence.

UBS, however, reported that the outflows had slowed and turned around in June. Global wealth management at UBS reported $16 billion in net fresh capital.

For UBS, the first merger of two internationally significant systemically important banks brings both potential and threats.

Analysts point out that UBS paid just 3 billion Swiss francs to acquire Credit Suisse, but in order for the deal to succeed, UBS will need to cut expenses, downsize Credit Suisse’s investment bank, and retain its high-net-worth clients.

Although group-wide results only contain one month’s worth of earnings from Credit Suisse because the acquisition was only finalised in June, UBS reported a net profit of $29 billion for the second quarter.

The hefty profit is the result of a huge one-time gain that illustrates how the purchase expenses were significantly less than Credit Suisse’s value. It was somewhat below than the bank’s poll’s consensus expectation of $33.45 billion.

(Adapted from BusinessInsider.in)