NC officials cancel incentives package for Credit Suisse

North Carolina commerce officials on Tuesday voted to terminate a lucrative incentives package for Credit Suisse after the company said it wouldn’t be able to meet hiring goals in the wake of its merger with Swiss financial giant UBS.

Credit Suisse in 2017 said it planned to add 1,200 jobs at a technology hub in North Carolina. The state had approved more than $40 million in tax breaks to lure the jobs away from the New York City area. The planned jobs were expected to create more than $100 million in salary in the state as well as add a $70.5 million investment in a new building, WRAL previously reported.

Credit Suisse requested the termination in a Jan. 30 letter to state officials. Executives said the termination request was due in part to strategic changes after Credit Suisse was bought by UBS as part of a deal that closed in June 2023.

UBS has been focused on cost-cutting in the months following its acquisition of Credit Suisse — a $3 billion deal orchestrated by Swiss regulators seeking to avoid a global banking meltdown.

UBS “is in the process of integrating the two companies,” Heather Kuttler Gallagher, Credit Suisse’s U.S. chief operating officer, said in the Jan. 30 letter. “As part of this integration, the number of employees at the facility has declined below the point where we will meet the minimum employee count under the grant.”

As of Dec. 31, Credit Suisse had 1,753 full-time employees in Research Triangle Park, according to the company. That's about how many it had at the time of the expansion announcement in 2017. The company has also maintained a $108.9 million investment that was certified under its 2017 incentives package commitment, the company said.

The state Department of Commerce’s Economic Investment Committee approved the incentives termination Tuesday. Officials said Credit Suisse had received at least three payments related to the incentives. The payments totaled about $5.1 million, according to a commerce spokesman. The company can keep those payments because it is maintaining operations in the state because it exceeded its target capital investment, the spokesman said.

Credit Suisse decided after the 2001 terrorist attacks to move certain back-office operations away from New York City. The company in 2004 announced it was investing $100 million in a support and information technology center for its investment banking division in RTP. That location has also included finance professionals and has housed data analytics and cybersecurity functions, as well as operations, risk management, compliance and audit services.

Kuttler Gallagher said UBS is committed to remaining in North Carolina and that it intends to retain a significant presence in the state but that it doesn’t expect employee counts required under the grant over the next several years. UBS intends to retain and utilize the new building constructed in RTP as part of its investment in the region, she said in the letter.

Cuts at UBS

Last week, UBS reported a fourth-quarter loss of $751 million as it continued to integrate the companies. UBS said operating expenses increased 43% to $5.1 billion in the quarter, due in part to consolidation expenses.

UBS said it expects to complete the merger of Credit Suisse under a single U.S. holding company by the end of June while it continues to merge other global operations. It also plans to save about $13 billion through cost-cutting efforts by the end of 2026.

The company said the cost savings would “provide necessary capacity for reinvestment to reinforce the resilience of our combined infrastructure as we absorb Credit Suisse and to drive sustainable growth.”

“As we move to the next phase of our journey, we will focus on restructuring and optimizing the combined businesses,” UBS Chief Executive Sergio Ermotti said in a statement last week.