EVEN before Credit Suisse’s government-brokered takeover, the Swiss lender was in the process of cutting 9,000 jobs in an effort to save itself.

That’s only the beginning after rival UBS Group agreed to buy the troubled bank, according to people familiar with the discussions, with one person estimating the final toll could be a multiple of that number.

The merger creates significant overlaps. The two lenders together employed almost 125,000 people at the end of last year, with about 30 per cent of the total in Switzerland.

UBS chairman Colm Kelleher said it’s too soon to know a job-cut number, but UBS indicated it will be significant. The bank said in a statement on Sunday (Mar 19) it plans to cut the combined company’s annual cost base by more than US$8 billion by 2027. That’s almost half of Credit Suisse’s expenses last year.

Kelleher said UBS was determined to keep Credit Suisse’s profitable Swiss unit, despite concerns about concentration in the domestic market from this deal. He was also clear that UBS is excited about Credit Suisse’s wealth management business, but less so about its investment bank. The investment bank will be shrinking, likely ending the dreams of a CS First Boston spinoff.

“Let me be very specific on this: UBS intends to downsize Credit Suisse’s investment banking business and align it with our conservative risk culture,” Kelleher said at Sunday’s press conference.

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The UBS chairman said he understood the coming months would be “difficult” for Credit Suisse staff and promised UBS will do what it can to keep the uncertainty as short as possible.

Kelleher and UBS chief executive officer Ralph Hamers will retain their roles in the combined entity. A representative for Finma, the Swiss regulator, said at the press conference that Credit Suisse’s management will stay in place until the deal closes. Then, their future becomes a decision for UBS.

In Asia, where the two firms rank among the largest wealth managers, the deal carries the risk that clients who currently have money with both firms will move part of it to a competitor to avoid having too much exposure to a single firm.

Credit Suisse chief executive officer Ulrich Koerner said on Tuesday he had already cut about 8 per cent of headcount. BLOOMBERG