[ by Melanie Gretchen ]

Should Credit Suisse employees be relieved or start hitting jobs sites?

Credit Suisse Group AG is looking away from its employees in its latest effort to costs, people familiar with the Swiss bank's thinking said Wednesday.  Instead, Switzerland's 2nd-largest bank by assets is considering combining its asset-management and private-banking units toward reducing costs through the elimination of duplications in back-office functions.

Two Sides of the Same Coin. While that's not cutting jobs per se, that possibility, in the context of the previously planned sale of 2 private-equity-related businesses, can't be good news.  Or it could be, if you're lucky to be one of the key cogs in the bank's progress to realign its businesses to focus on client flows, one of the people said.  A final decision may occur as early as next month, another person familiar with the bank's thinking said.

The Big Picture. Credit Suisse's latest consideration isn't extraordinary.  Goldman Sachs Group Inc. and Deutsche Bank AG house their wealth-management and asset-management units together, as do other financial firms.  Moreover, Credit Suisse's asset-management unit manages about $360 billion in assets and offers mutual funds, alternative investments and other products to institutional clients and private investors – many of which are already are sold through Credit Suisse's private-banking division.

Other Recent Downgrades:

• The reductions of its investment in Aberdeen Asset Management to less than 3% by the end of the second quarter from about 20% at the beginning of the year.
• Plans to reduce costs by one billion Swiss francs ($1.07 billion) by the end of 2013 – toward which the asset-management unit will likely contribute some 100 francs

Up until recently, the bank's cost-cutting program has led to the elimination of 3,500 jobs, including this year's headcount decline from 49,000 to 48,200.  Nevertheless, CFO David Mathers said the new cost-cutting program, which has saved the bank some 2 billion Swiss francs, isn't focused solely on its employees.

"We continue to focus on streamlining the operating platform and reducing expenses, particularly by shifting head count to lower cost locations within the supported areas." -- Mr. Mathers.

C-I Note: We recommend that everyone be prepared.

For further details, go to [WSJ, 9/26/12].