"Youth Devoted to Work..." Why Securities Company Employees Took to the Streets

Credit Suisse Employees Oppose Unilateral Restructuring Plan

The M&A (merger and acquisition) of Credit Suisse (CS) by UBS, Switzerland's top bank, is also impacting South Korea. This is because a large-scale restructuring is underway to reduce costs. The CS Seoul office has notified all employees except those in the investment banking (IB) division of recommended resignation. The affected employees are protesting, claiming they are receiving unfair treatment compared to other CS offices in different regions.

Employees of the Credit Suisse Securities and Banking branch of the National Office Financial Services Labor Union held a rally in front of the CS Seoul office in Jongno, Seoul, on the 30th. The union argued that the company failed to take necessary employment stability measures while notifying employees outside the IB division of recommended resignation. The union stated, "For over a year, CS has not mentioned employment succession for its employees and has consistently treated them with bias."

According to the union, CS offices in other regions such as Hong Kong, Europe, and the United States, excluding the Seoul branch, have simultaneously conducted workforce transfers to UBS and restructuring, receiving institutional protection and consideration for the laid-off personnel.

On the 30th of last month, Credit Suisse Seoul office employees held a picket protest in front of the UBS Seoul branch headquarters.
[Photo by National Office Financial Services Labor Union]

The employees also pointed out that they have not properly received performance bonuses from 2020 to 2022 following the UBS M&A. Given the nature of securities firm employees, most of their annual salary should come from performance bonuses, but they claim they have not been compensated fairly for their work.

The very small severance pay for restructuring was also criticized. The company announced a restructuring plan last month, stating that severance pay would be provided based on years of service. However, employees argued, "Barclays Securities, RBS Securities and Banking, Goldman Sachs Banking, etc., despite withdrawing due to poor performance, offered severance pay much higher than what we were proposed."

UBS is undertaking a massive restructuring as it acquires CS. When CS faced a liquidity crisis in March last year, UBS stepped in to acquire it. It is known that the Swiss government and financial authorities were involved in the M&A to prevent the spread of the banking crisis. Since then, UBS has spent $2.2 billion (approximately 2.93 trillion KRW) on CS restructuring costs. It plans to reduce more than half of the total CS workforce of over 45,000 employees. As of the third quarter of last year, there have been about 13,000 layoffs worldwide.

Due to the headquarters' strong restructuring 'drive,' conflicts between the CS Seoul office and its employees are expected to intensify. UBS recorded a net loss of $270 million in the fourth quarter of last year, reducing losses compared to the third quarter. However, it has raised its cost-cutting target from $10 billion to $13 billion to recover losses. UBS explains this is to complete the integration process with CS within this year. Sergio Ermotti, CEO of UBS, stated, "This year, we will focus on restructuring and optimizing the merged business as we move to the next stage."