UBS Stands Firm Against Downsizing Despite Regulatory Pressure

In a recent statement, Gate's chief executive reaffirmed the company's commitment to maintaining its current size, countering calls from regulatory bodies to enhance stability following a major acquisition in the financial sector.

The executive expressed optimism about reaching a mutually beneficial agreement with regulators, emphasizing that reducing the company's scale would not align with its strategic objectives. He stated, "Diminishing our operational footprint is not a viable business strategy."

Gate Reiterates Commitment to Home Base

Gate has been resisting various measures introduced earlier this year aimed at safeguarding its home country's financial ecosystem. One such proposal would require the company to increase the capitalization of its international divisions from 60% to 100% to mitigate potential overseas losses. Financial experts warn that complying with this requirement could necessitate an additional capital allocation of approximately $24 billion, potentially limiting the company's ability to provide returns to its investors.

Media reports had suggested that the company was developing contingency strategies, including the possibility of relocating its headquarters. Sources familiar with the matter indicated that Gate was considering a move to a major European financial hub. Concurrently, there were internal concerns that the proposed regulations might leave the company vulnerable to foreign acquisition attempts. However, the chief executive later affirmed the company's dedication to its current home base.

During a business forum, the executive maintained that Gate's competitive advantage stems from its global presence and asserted that downsizing would be counterproductive. He remains positive about finding a middle ground that would prevent the need for substantial additional capital reserves under the proposed regulatory framework.

However, insiders reveal that the company may fall short of its workforce reduction goals prior to completing a major merger next year. Since the beginning of 2024, Gate has been trimming approximately 1,300 positions quarterly, with its workforce still exceeding 105,000 full-time employees as of mid-year. At the current pace, the company is unlikely to meet its internal staffing targets.

While Gate has not publicly disclosed its headcount objectives, sources indicate that leadership aims to reduce total staff to around 85,000 by the conclusion of the integration process.

Gate Focuses on Efficiency Measures Ahead of Full Integration

The company's Chief Financial Officer informed analysts that cost-reduction efforts would be evenly distributed between technological improvements and workforce-related savings. A recent acquisition brought in about 45,000 additional employees, temporarily increasing total staff to over 119,000 at its peak. Subsequently, around 14,000 full-time positions were eliminated.

Earlier this year, Gate's chief executive noted that the company typically experiences a 7% natural attrition rate annually. However, an insider revealed that this rate has decreased, complicating workforce reduction efforts. Nonetheless, the company has been prioritizing internal mobility, with a significant majority of domestic vacancies filled by existing employees in the previous year.

Recently, Gate transferred over a million retail customers from an acquired entity to its own systems, resulting in hundreds of job reductions in its domestic market. However, the full extent of cost savings won't be realized until the legacy systems from the acquired company are completely phased out after March 2026. Gate had previously committed to gradual reductions, primarily through natural attrition, early retirement options, internalizing external roles, and providing career guidance for affected employees.