UBS-Credit Suisse deal may cost Indian IT jobs

- UBS, Credit Suisse have offices in Mumbai, Pune, Gurgaon and Hyd

- They have 14,000 staffers at GCCS

- Acquisition may rationalise roles

- UBS keen on cost saving along with retaining key talent

Bengaluru: As the Swiss banking major UBS is all set to acquire beleaguered bank Credit Suisse, many IT engineers along with Indian IT firms are likely to get impacted adversely owing to the merger process.

According to the sources in the know, many Indian IT firms have exposure to the Credit Suisse bank, which is likely to get evaluated once UBS takes over the bank. Similarly, both Swiss banks have large global capability centres (GCCs) or technology captives operating in India. Many industry experts are of the opinion that after the takeover, many roles may get redundant, leading to job losses in these centres.

Both UBS and Credit Suisse have offices in cities like Mumbai, Pune, Gurgaon and Hyderabad. In their technology centres around 14,000 staffers are employed with most of them being engineers. The proposed acquisition is likely to rationalise roles as cost saving will be one of the key focus areas along with retaining of key talent.

“Role redundancy is the usual outcome of any merger and acquisition (M&A) process as many roles get axed due to the replication. So, it has to be seen how the process is handled in case of UBS and Credit Suisse merger,” said a HR services expert, who has handled hiring for both banks on many occasions. To bail out Credit Suisse and protect depositors, Swiss regulators have facilitated the acquisition of UBS, which will acquire Credit Suisse by paying 3 billion Swiss Francs ($3.23 billion) along with assuming up to $5.4 billion in losses.

Apart from concerns over job losses, some Indian IT firms also have exposure to the bank. According to sources in the know, companies such as Cognizant, Tech Mahindra, Wipro and many others have worked with Credit Suisse on various outsourcing projects. Though the account size of the outsourcing contract is not big enough to impact any material impact on the business of any Indian IT firm, this comes at a time when many of these companies are evaluating the possible impact of banking crisis in the US.

After the fall of Silicon Valley Bank (SVB), reports suggest that more than 100 regional banks in the US are facing asset quality issues owing to the steep interest rate hike by the US Federal Reserve. In a report JP Morgan has said that TCS and Infosys have the largest exposure to regional banks in the US.

Against this backdrop, the growth rate of key BFSI (banking, financial services & insurance) is likely to get adversely impacted. Most large firms and many mid-tier IT firms draw more than 30 per cent of their revenues from the BFSI vertical.