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Credit Suisse London bankers fear annihilation next week




Credit Suisse will cut jobs. When the Swiss bank announced its restructuring plan last week, it said it intended to lay off 2,700 people before Christmas. A good number of them are likely to be investment bankers in the UK.

While Credit Suisse will maintain an M&A advisory team in EMEA as part of its new CS First Boston operation, equity capital markets, debt capital markets and leveraged financial bankers of the bank in Europe will all be surplus to requirements. Insiders say they have heard they could be released as soon as next week.

Credit Suisse declined to comment on the timing of the cuts. “We will scale our capital markets business in EMEA to a true advisory-only business,” Credit Suisse CEO/hands-on Ulrich Koerner said last Thursday. “We haven’t had results for many years and we don’t have the good reputation in EMEA.”

As Credit Suisse maintains its presence in areas such as leveraged finance in the US despite $120m in writedowns in the third quarter, leveraged finance bankers are among those cut in London . “Massive cuts are expected next week, but we have no real idea what they might look like,” says a London debt capital markets banker in the City. “Everyone I’ve spoken to at CS in London over the past few days is now expecting to be cut,” says one headhunter. “They just don’t know when, but they think it could be next week.”

The more optimistic CS bankers apparently hope to be employed for another six months while they wait to see how the “Klein plan lands”. However, the investment bank’s $666 million loss in the third quarter could avert a long delay. The same goes for the collapse of 89% of the bank’s income in the capital markets.

If the CS bankers are laid off in London next week, they are unlikely to receive a big payout. The current rate of bank severance pay in the UK is supposed to be just two weeks for each year of service.

Not everyone is sure that Michael Klein’s CS First Boston will be as great as Credit Suisse says. “This is a group of leveraged financiers and sponsor bankers posing as M&A bankers,” a senior CS insider told us. “The idea that it will be the light of capital is kind of laughable.”

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