Layoff Watch '17: Credit Suisse’s Firings Last Year Went So Well It’s Going To Do Some More

The Swiss...missed.
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By World Economic Forum from Cologny, Switzerland [CC BY-SA 2.0], via Wikimedia Commons

By World Economic Forum from Cologny, Switzerland [CC BY-SA 2.0], via Wikimedia Commons

"We’re off to a good start,” Credit Suisse CEO Tidjane Thiam has proclaimed of the early going in 2017. That may all be relative, since the bank suffered a larger-than-expected loss for the fourth quarter on account of its decision not to roll the dice with the Trump Justice Dept. That good start, however, won’t save the 5,500 people Thiam plans to bid adieu to this year. Layoffs were about the only thing he was good at in 2016, so employees should re-gird their loins.

“We will not relent on the pace of cost reductions going forward,” Mr. Thiam said during a conference call with analysts on Tuesday.

As for non-cost-reduction activities, well, Thiam still has some work to do. CS said it would move forward with plans to spin-off its local Swiss bank in an IPO and to once again rejigger how it reports the state of its business in Asia. Neither is impressing.

Listing the domestic arm would provide $2 billion to $4 billion, far more than Credit Suisse now needs. The Swiss Universal Bank is its most reliable source of earnings. For the sake of future income, Credit Suisse should stop the tease and forget this listing.

Credit Suisse is changing how it reports its Asia business. Again. And the early look it gave investors into profits under the new set-up don’t make much sense….

The pro-forma profit figure given on the analyst call for Asia’s good bit in 2015 (which is the Asia private bank plus some of the Asia investment bank – slide 30, here) is lower than the profit figure on the same basis for the Asia private bank alone given elsewhere in its earnings statements (page 20, here).

Credit Suisse Posts Loss, but Investors Eye Its 2017 Start [WSJ]
Credit Suisse to Eliminate 5,500 Jobs in Latest Cost-Cutting Drive [DealBook]
Credit Suisse’s Universally Bad Idea [WSJ]
Credit Suisse’s Vexing Earnings Changes [WSJ]

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