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There are fears in the securitized products group.

Credit Suisse's next round of job cuts starts Monday

If you've survived so far at Credit Suisse, you might be feeling optimistic. But don't get too comfortable. Sources tell us the next round of cuts at the Swiss bank starts next week. 

Monday 12th December has apparently been tabled as the start of the next round of layoffs at Credit Suisse. CS isn't commenting but at the time of its restructuring announcement, the bank said it planned to cut 2,700 people before Christmas and 9,000 people by 2025.

The upshot is that many in the bank face relentless rounds of redundancies. So far, the cuts seem to have focused on areas like European credit sales and trading, where the early layoffs were particularly harsh. Bloomberg reported last week that Credit Suisse was thinking of cutting a third of its fixed income sales jobs globally.

The next round of cuts may impact areas like investment grade sales and trading, which has so far been comparatively untouched. People in areas like the structured products group (SPG), which is being moved to Apollo are also concerned, however.

Are cuts coming in the SPG?

In mid-November, Jay Kim, Credit Suisse's global head of securitized products trading, sent an email to staff in the group explaining that the situation remains uncertain. In the email, seen by eFinancialCareers, Kim says it had been "an unbelievably difficult situation" for everyone involved and that his personal involvement in the Apollo deal was "peripheral", with negotiations occurring instead between Apollo and "corporate development and risk," at Credit Suisse.

The historical model of securitized products within investment banking is "under real and tremendous threat," said Kim, adding that although the Apollo deal will be a "massive and unbelievable win" for everyone, it's also an "incredibly difficult and challenging period of uncertainty," while it's finalized.  However, this isn't expected to happen until early 2023, and CS has already indicated that not everyone in the current group will be needed. 

Insiders in the SPG say the fear is that all the securitized products salespeople, traders and structurers will be let go. "Apollo only want the securitized product assets that CS has now and the pipeline to those future assets," claims one insider.

In an investor call last month, Apollo said its approach to the securitization business is very different to banks' approach: "For the most part, a bank wants the client, they can sell the client payments and FX, hedging and M&A and equity and a whole range of services that we and our peers are not really equipped, nor do I believe we will be equipped to offer. What we want is the asset..."

Miller in London

As we reported yesterday, David Miller, the global head of investment banking & capital markets at Credit Suisse is currently in London, seemingly to offer some reassurance to people Credit Suisse wants to keep. Miller's presence is not understood to be related to the coming cuts, however.

Credit Suisse declined to comment.

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AUTHORSarah Butcher Global Editor

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