Credit Suisse Advanced Execution Services (AES), the bank’s algorithmic trading arm, is expected to escape much of the impact of plans to axe 5,300 jobs.
The Swiss bank said that most of the cuts – which account for 11% of its workforce –will fall in its investment banking division, but a statement accompanying its Q4 performance update asserted that algorithmic and equities trading would play a key role in serving clients in today’s tough trading conditions. A spokesperson added that AES was one of the bank’s best performing businesses, but declined to comment further on the impact of today’s announcement on algorithmic trading services or the bank’s overall equities trading division.
The bank noted that in the current volatile environment, clients are eschewing more complex products in favour of exchange-based and flow trading. “The shift towards more liquid products will build upon the momentum that Credit Suisse has already achieved in areas such as algorithmic trading, cash equities, prime services, rates, foreign exchange high-grade credit and strategic advisory businesses,” the statement said.
The job cuts are part of an overall restructuring plan at Credit Suisse’s investment banking division. It is reducing origination capacity in its complex credit and structured products businesses and is cutting capital usage. This includes exiting certain proprietary and principal trading operations.
The bank’s estimated net loss for Q4 up until the end of November was SFr3 billion ($2.5 billion). The majority of the job cuts to be complete by the end of the first half of 2009, and Credit Suisse estimates they will reduce annual costs by SFr 2 billion ($1.7 billion).