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Credit suisse axe jobs.

London faces a wave of job losses after the new boss of Credit Suisse plans to cut 9,000 roles across the bank as part of a drastic restructuring of the troubled group.

Ulrich Körner said that «nobody takes it lightly» yesterday as the bank revealed it would lower its headcount of full-time employees worldwide from 52,000 to about 43,000 by the end of 2025 to help reduce its cost base by around CHF2.5 billion, or 15 per cent. The cuts are one element of a complex strategy to try to restore the lossmaking group to profitability and put an end to years of scandals. It includes raising about CHF4 billion from investors, including Saudi National Bank, which has committed to putting in up to CHF1.5 billion, and a plan to shrink its struggling investment banking business, part of which will eventually be spun off under the resurrected First Boston brand. However, shares in the group tumbled by nearly 19 per cent in Zurich as investors baulked at the prospect of extensive fundraising and the possibility that the complicated overhaul could go wrong.

Yesterday's disclosure of heavy third-quarter net losses of CHF4 billion, which was far worse than analysts had expected, also knocked the shares. Körner declined to say how many roles would be lost from its operations in London. Much of the business in London is centred on investment banking, a primary focus of the new chief's overhaul. If the restructuring proves successful, it will cement Körner's reputation as a turnaround expert.

He was previously a top executive at the rival Swiss bank UBS, overseeing thousands of job cuts and acquiring the moniker «Uli the knife». They include suffering heavy losses from the collapse of Archegos, an investment firm, and a furore over corporate espionage. The dire quarterly results released alongside the announcement of Körner's strategy laid bare the scale of his challenge. The group's overall net loss was driven by a CHF3.7 billion impairment of deferred tax assets.

However, Körner highlighted «a weaker performance for our investment bank in particular», with the division falling to a $691 million pre-tax loss in the period. This investment bank will now be significantly scaled back through a 40 per cent reduction in risk-weighted assets, and Christian Meissner, who had been running it, has left with immediate effect. As part of the revamp, the investment bank will also be split up, with its capital markets and advisory activities housed in a New York-based unit called CS First Boston and eventually spun off, possibly through a listing. Körner's overhaul has been keenly anticipated and the subject of much speculation.

Tidjane Thiam was the first chief executive in recent years to attempt a significant revamp after his appointment in 2015. Thiam, known in the City of London from his time in charge of Prudential, the FTSE 100 insurer, aimed to tilt the Zurich-based group away from competing with US investment banks and back towards servicing wealthy clients through its wealth management business. However, in 2019, the bank became embroiled in a spying scandal after a senior executive, Iqbal Khan, was followed after resigning to join rival UBS. Khan had bought a house next to Thiam, and the argument centred on trees at the chief executive's property.

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