Credit Suisse cuts 4,000 jobs after first loss since crisis

credit suisse building

Credit Suisse is paying a hefty price for its investment banking business.

The bank’s shares plunged more than 11% on Thursday, after it posted a net loss of 2.9 billion Swiss francs ($2.8 billion) in 2015 — its first annual loss since 2008.

Credit Suisse (CS) wrote down the value of its investment banking business by 3.8 billion francs ($3.8 billion) in the fourth quarter. It said the charge related to its acquisition of Wall Street firm Donaldson, Lufkin Jenrette in 2000.

The $11.5 billion deal to buy DLJ 15 years ago was hailed as the bank’s breakthrough on Wall Street. But the expansion in investment banking hasn’t generated the returns the Swiss bank expected.

Credit Suisse CEO Tidjane Thiam vowed to speed up his huge cost cutting program in 2016, announcing the bank will shed 4,000 jobs.

“Given the particularly challenging environment we face, we decided in the fourth quarter to accelerate the implementation of our cost savings program across the bank,” he said.

Thiam, who has only been in the job for seven months, first announced his plans to reshape the bank in October. He wants to focus on wealth management, and emerging markets. He raised more capital from investors and promised to cut costs by 3.5 billion francs ($3.5 billion) before the end of 2018.

“After announcing its new strategic plan at the end of last year, it was clear that [the fourth quarter] was going to be a kitchen sinking quarter, but the numbers reported today are weak even after adjusting for one-offs,” said bank analysts at BNP Paribas.

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