Credit Suisse horror as bankers waiting for 'golden nuggets' cut
There's been a change in the mood music at Credit Suisse. This time last week, people there were feeling buzzy about the prospect of receiving retention bonuses and stock in the new venture. Today and yesterday, swathes of EMEA bankers are and have been losing their jobs.
Financial News reported yesterday that Credit Suisse is cutting 50% of the 900 client facing people in its European investment banking business. The bank isn't commenting on who's going, but the carnage is seemingly far greater than anticipated in EMEA. Yesterday, the bank seemingly chopped its much of its European equity capital markets team, plus some DCM bankers. Today, it's cutting across Continental Europe, and bankers in Paris and Frankfurt are understood to be receiving the bad news.
Many of the cuts have come as a surprise. Those who are out are understood to include Dimitris Papadopoulos, the European head of CLO origination who was hired from Natixis in January 2021, plus three of his team.
Headhunters say that bankers who last week were expecting to receive lucrative retention bonuses and stock in CS First Boston are this week being told they're no longer required. "A lot of the people I'm talking to now were last week promised they'd get golden nuggets in the form of equity in the CS First Boston spinout," says one headhunter. "Trinkets were being dangled around Europe, but it's becoming clear that the spin-off is mostly about the US."
Credit Suisse famously awarded senior bankers lucrative long term bonuses structured from toxic debt after the financial crisis. Senior people at the bank in Europe were seemingly hoping the CS First Boston spin out would lead to similarly high returns over time. "This would have been an opportunity to make proper money," says the headhunter.
Instead, many at CS are now waking up to the reality that their jobs no longer exist. Unfortunately, they are being released into a market where other banks (eg. Citi and Barclays) are also cutting headcount.
The good news, however, is that unwanted CS bankers could be at the front of the queue when it comes to reemployment. While other banks are clearly cutting underperformers, Credit Suisse is engaged in something different. "You have very good people there getting dinged for no clear reason," says another headhunter. He says the most desirable people are in the financial sponsors, leveraged finance, consumer and retail and possibly the industrials team. Banks like Moelis & Co, JPMorgan, Jefferies and others have all expressed an interest in adding talent.
Some are skeptical about the calibre of senior CS staff losing their jobs in Europe. though. "All the good MDs left a year ago," another headhunter reflects.
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