Since June 2023, France has been suffering from many political and financial crises. Due to the poor growth of the economy in this nation, several companies, such as UBS Group AG, are planning to reduce jobs in France. Due to the uncertainty of the political situation in France, the country faces many financial issues. In addition, it is also estimated that economic growth in the country will slow at 0.2% per quarter in early 2025.
Many financial institutions, like UBS, faced challenges of growth limitation and profitability due to these economic crises. While integrating, Credit Suisse needed cost-cutting measures, and for this purpose, they increased internal pressure on France.
UBS cut jobs because this was the only way to handle the challenges, reduce expenses, and streamline operations. France’s economic crisis not only impacts its landscape, but some other institutes are also facing difficulties.
UBS is trying to adapt itself to the present environment with proper positioning for more stable growth in the future.
UBS has noted that the integration process with Credit Suisse has come off much better than their expectations. Integrating two large financial organizations is still a challenging, but not easy, exercise since this brings along the restructuring of significant operations around different regions. In this whole process, UBS is reviewing its global strategy and how it can make it efficient in such a way that it will be compatible with long-term goals, and among those major regions, France finds its space.
Though vague the restructuring UBS committed itself to minimize adverse effects to its employees. The bank is very active in presenting its plans for reduction through its works council. The bank also looks forward to cooperating closely with employee representatives on deciding measures to fully support their affected staff in reductions. Those include severance packages and career transition support. This strategy demonstrates UBS’s commitment to maintaining an appropriate level of operational efficiency and financial stability while maintaining a level of social responsibility as the firm undergoes its important transitional phase.
Examining UBS job cut growth
UBS announced almost one in twelve job cuts in Switzerland based on an announcement of layoffs it made in August of 2023 while it set a goal of eliminating over $10 billion from its books by 2026 with the takeover of Credit Suisse. As of April 2024, UBS also presented a timeline of job eliminations in waves, which started in June 2024 and ended in November 2024.
The bank will dump 50 percent to 60 percent of former Credit Suisse staff. In fact, such a massive overhaul signaled UBS’s full-scale takeover of Credit Suisse without any operational waste or duplication. These restructuring steps reflect the resistance of UBS’s stock price.
The sector had declined by 5.2% but UBS’s stocks went up by 0.9% in the NYSE within three months. It means that even in trying market conditions, investors still believe in UBS’ decisions and strategic choices. UBS is so dedicated to its long-run profitability, considering dealing with the complexity of a very large purchase in finance as can be evident through restructuring.
This move by UBS is seen as essential to navigating the challenging economic landscape in the country and the difficulties associated with integrating Credit Suisse. Early projections for 2025 indicate that the French economy will experience sluggish growth of just 0.2% and a high unemployment rate of approximately 7.3%. In this context, UBS’s decision to cut jobs exacerbates the situation by further diminishing consumer spending and increasing joblessness.