CS Holding Will Eliminate 5,000 Jobs, Many in the U.S.

Swiss banking conglomerate CS Holding on Tuesday announced plans to eliminate about 5,000 jobs worldwide, nearly a third of them in the United States, as it reorganizes to focus on its core banking and investment businesses in an effort to become a leaner global player.

CS Holding, which will change its name to Credit Suisse Group at the start of 1997, said it will take a restructuring charge of $800.5 million. The company’s operations include Wall Street firm CS First Boston.

Analysts welcomed the announcement as a major step toward restructuring in a financial group whose current mixed character had prompted some caution among investors.

“It is an extremely far-reaching restructuring that is very modern, the same direction that the other two big Swiss banks [UBS and Swiss Bank Corp.] are moving in,” said Christoph Bieri at Zurich Kantonalbank.

CS, Switzerland’s second-largest bank, said it will focus on its core activities by realigning its businesses into four specialized and autonomous units.

“Simply put, we will significantly sharpen our international role and advance our strategy to continue as one of the foremost financial institutions in the world,” Chairman Rainer Gut told a news conference.

The realignment plans come nearly three months after Union Bank of Switzerland, the largest bank in Switzerland, rejected CS Holding’s overtures of a merger that would have created the biggest banking company in Europe.

The job loss represents about 10% of CS Holding’s global work force of about 50,000. About 3,500 of the jobs to be eliminated over two to three years will be in Switzerland, and the company said most of the remaining 1,500 cuts are to be made at First Boston, which is 68.7%-owned by CS Holding. The U.S. job cuts will be mostly in clerical and administrative operations that will be duplicated as a result of combining international investment banking operations into a unit to be called Credit Suisse First Boston.