Credit Suisse Group is preparing to ax roughly 3% of its workforce, or at least 1,500 jobs, including staff cuts at its private banking unit which is struggling with a costly surge in the Swiss franc, a person familiar with the situation told Dow Jones Newswires.
Of the jobs to go, 500 are at Zurich-based Credit Suisse's private bank, where the strong Swiss franc against other major currencies is a major worry because it eats away at revenue and assets. The Swiss currency gained nearly 7% against the euro and over 9% against the dollar in the second quarter.
The 1,500 total also includes 600 jobs at Credit Suisse's investment bank following a lackluster second-quarter trading result, which was previously reported by Dow Jones Newswires.
Marc Dosch, a spokesman for Credit Suisse didn't comment on the specific numbers.
"Managing costs proactively is an ongoing priority -- also in the current challenging environment," Dosch said in an emailed statement.
While investment banking job cuts were expected following a slowdown on Wall Street in recent months and cuts from rivals, the private bank cutbacks are more of a surprise.
Many private banks are taking a hard look at their spending to soften the blow from a high portion of costs in Swiss francs and a major portion of revenue in other currencies, chiefly the dollar and euro. The strong franc also erodes the value of assets held in other currencies.
Credit Suisse's private bank took a 130 million Swiss franc ($159 million) pretax hit from the franc in its first quarter's earnings, when overall net profit fell 45% to CHF1.14 billion.
Credit Suisse isn't the only major private bank to resort to staff cuts in recent weeks. Cross-town rival UBS AG is cutting 250 jobs from a private bank unit offering investment bank-style products to wealthy clients, a person told Dow Jones earlier this month. This comes on top of 500 jobs Zurich-based UBS is cutting in information technology, the bulk in Switzerland and the U.S.
UBS reports the quarter on July 26, Credit Suisse on July 28.
Katharina Bart is a reporter for Dow Jones Newswires, where this story originally appeared. Write to her here.