Discover the layoff announcements from different industries on the week of June 26
Layoffs
July 10, 2023
UBS Group AG is set to implement substantial job cuts at Credit Suisse Group AG, with plans to reduce the workforce by over 50%. The cutbacks are a direct consequence of UBS's emergency takeover of Credit Suisse. Bankers, traders, and support staff in Credit Suisse's investment bank, particularly in London, New York, and parts of Asia, are expected to bear the brunt of the layoffs.
Credit Suisse employees have been informed about three rounds of job cuts scheduled for this year. The first round is expected to take place by the end of July, followed by two additional rounds tentatively planned for September and October. UBS aims to save approximately $6 billion in staff costs over the coming years and intends to reduce the combined headcount by about 30%, or 35,000 employees.
The layoff decision stems from UBS's goal to address Credit Suisse's loss-making investment bank, which incurred a $5.5 billion loss in the Archegos Capital Management scandal of 2021. UBS had initially planned to retain the top 20% of dealmakers, specifically those focused on technology, media, and telecoms. However, several high-performing bankers have already left or been recruited by competing institutions. Additionally, UBS seeks to consolidate its position and mitigate risks in the wake of the takeover.
Since the takeover, UBS has been actively integrating Credit Suisse into its operations. The executive board now predominantly consists of UBS executives, with only one Credit Suisse holdover. UBS is primarily looking to retain Credit Suisse's private bankers, but many have already departed. In the Asia Pacific region, UBS plans to retain a few hundred private bankers from Credit Suisse, bringing their total to over 1,200. There are ongoing discussions about the future of the Swiss domestic business, with a decision expected in the third quarter.
The layoffs at Credit Suisse further contribute to the challenging year for financial sector jobs globally, following similar workforce reductions announced by other major investment banks like Morgan Stanley and Goldman Sachs Group Inc.
Illumina Inc, a genetic sequencing equipment maker, recently initiated job cuts in response to challenges posed by sticky inflation and a strong dollar. Illumina aims to mitigate these impacts by reducing expenses. As part of its cost-cutting plan, Illumina intends to lay off 10% of its research and development team and reduce its real estate footprint in California. Illumina anticipates a reduction in annualized run rate expenses of over $100 million in 2023. While the exact number of employees affected by the layoffs remains undisclosed, the reduction in workforce began on June 21. These measures are expected to result in charges of approximately $25 to $35 million, with the majority incurred in the second quarter. Illumina's CEO, Francis deSouza, recently stepped down following a proxy battle with activist investor Carl Icahn.
Ford Motor Co. is reportedly planning to cut a minimum of 1,000 jobs in North America. These job reductions will affect both salaried employees and contract workers. The layoffs are a strategic move by Ford to support its investment in electric cars, as reported by the Wall Street Journal. Ford's stock has seen a significant increase of 22.8% in the past three months, outperforming the S&P 500's gain of 9.2%.
Ford's decision to lay off employees is driven by its commitment to expanding its presence in the electric car market. By reallocating resources and reducing costs, Ford aims to fund its ongoing investment in electric vehicle technologies. This move reflects Ford's strategic response to the evolving automotive industry, where electric vehicles are gaining prominence.
It is important for Ford to optimize its operations to compete effectively in the growing electric car segment. While job cuts are unfortunate, they are a necessary step for the company to realign its workforce and prioritize resources in line with its long-term goals. By focusing on electric vehicles, Ford aims to position itself as a key player in the rapidly changing automotive landscape.
As the market continues to evolve, it is essential for automotive companies like Ford to adapt and invest in emerging technologies. This shift towards electric vehicles aligns with the broader industry trend and changing consumer preferences. Ford's commitment to innovation and sustainability underscores its determination to remain competitive and meet the demands of the future.
Robinhood, the popular stock-trading app, has recently announced a workforce reduction of approximately 7%, impacting around 150 full-time employees. Robinhood's Chief Financial Officer, Jason Warnick, explained that these layoffs were aimed at adjusting to trading volume fluctuations and optimizing team structures. This marks the third round of layoffs for Robinhood within a year, reflecting a cooling in trading activity on the platform.
Robinhood spokesperson emphasized the company's commitment to operational excellence and stated that team adjustments are necessary to align with changes in volume, workload, organizational design, and other factors. The stock market responded positively to this news, with shares rising 1.2% after hours.
These recent layoffs by Robinhood can be attributed to the need for the company to adapt to evolving market conditions and maintain efficiency in their operations. As trading activity has slowed, it becomes essential for businesses to streamline their workforce to remain agile and sustainable in a competitive environment.
Google is implementing job cuts at its Waze mapping service as it integrates the unit with its own map products. The decision comes as Google shifts its Waze strategy to include Google ads, leading to layoffs in sales, marketing, operations, and analytics roles focused on Waze Ads monetization. Google aims to develop a more scalable and optimized Waze Ads product powered by Google Ads. The exact number of jobs to be eliminated was not specified in the email, but Waze currently employs over 500 people. These layoffs are part of Google's broader efforts to improve efficiency after announcing a 6% reduction in its workforce, amounting to 12,000 employees, in January. The integration of Waze into Google's Geo unit began in December, and Google has already seen changes in leadership. Despite the layoffs, Google remains committed to Waze's brand, app, and community of volunteers and users.
Blue Apron Inc. (APRN) recently announced its projection to achieve adjusted profitability in the second quarter of 2024. Despite this positive forecast, the meal-kit provider anticipates further staff reductions as part of its cost-cutting efforts. Blue Apron faced challenges related to funding and a decline in customers following the pandemic. In May, Blue Apron reached an agreement with FreshRealm to transfer its operational infrastructure. However, Blue Apron aims to continue streamlining its operations, planning for "additional headcount and other cost reductions" in the coming months. Blue Apron's historical financial performance has raised concerns, with adjusted EBITDA profits in 2019 and 2020, but overall annual losses. The announcement of potential layoffs and ongoing profitability concerns caused a 7.7% drop in shares after hours on Tuesday.
All data was sourced from LevelFields AI
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