On a more serious Note, many companies seem to have starved their organisations to death. Not enough people to even maintain their legacy. The logoc was that both AI would aolve the Problem and that they want to be slim during the recession.
Guess what, AI doesnt solve the Problem of „corporate debt“ aka Legacy… and recession still didn’t come yet. But at the same times, corporates feel that they can’t keep their organisationa that low on FTE much longer.
What is bound to happen? Recruitment will start in the next 9-12 months, and it will be a big wave. The only but is, corporates will recruit cheaper (lower seniority, nearshore, offshore). This will lead to deflation in Swiss salaries. So try to hang in there and enjoy the ride as long as You can. Because if You hit the street - your next job will pay 30% less.
What does this mean for us as investors? Get the f*** out of leveraged Swiss Real Estate.
As for the offshoring trend we’re seeing: any serious economic analysis will tell you that geographic labor arbitrage is just a band-aid. Sure, moving roles to low-cost jurisdictions pads short-term margins and keeps Wall Street happy for a few quarters. But without actual underlying gains in productivity and innovation, it does absolutely nothing to drive sustainable, long-term enterprise value.
UBS for instance did the offshore/nearshore thing couple of times in their history - always under a new CEO or responsible officer.
Lay off people → get cheap employees in India/Poland → realize after couple of years there is no benefit → bring jobs back to CH → cutting costs/start again
I think many companies are going through what big consulting firms sell as „Transformation“ and this is resulting in restructuring and mass layoffs. This is happening across the board - in Pharma, Banking, Chemicals, IT whatever.
I think Tariff drama last year, and then war now has put many companies under pressure for profits and they are buying into the Transformation idea sold by top consulting firms like BCG / McKinsey. AI is also giving the firms hope that they can do more with less. Although most of this is in pilot mode still.
Just saw the news that Oracle sent thousands of people an email that they are fired at 6 am.
Hang in there, I feel you’re thinking right, just hope you don’t try to cut corners with very risky investments.
On stability, my view and experience is that true safety, stability and smooth progression is more likely in boutique firms, where you may well have lunch or coffee or both with the owner of the company on a regular basis
I have lived this (SME, three partners/owners, 50-100 people) for 8 years and it was glorious. That’s the environment where even the lowest level employee will hear first hand how the company is doing, what are the issues, targets, finances, and won’t be randomly pulled into an HR meeting where they’re handed a severance contract, and “sign because your laptop will switch off in 30 minutes”.
Of course 99% of owners of SMEs want to sell, eventually, and then this whole thing breaks, seen this too. First the culture, perks and luxuries that built a TEAM get thrown out the window, then 25-50% of staff get fired, then 2-3 years later after the company has suffered in terms of output, quality, morale and of course profits they start hiring again and putting perks and luxuries back in to entice people to come/stay. Short term thinking at its worst. It’s mind boggling: highly profitable and successful SMEs get bought, broken, and then trying to get rebuilt. I want to say “it wasn’t broken when you bought it, bonehead”.
Another anecdote: This summer, 25 apprentices in canton Aargau will complete their Lehre, yet I was told there’s currently only one open position available for all of them. After three years of intensive internal training during which these young people (mostly 18–19 years old by now) spent their formative years learning the ropes, building loyalty and acquiring specific skills, most will likely be let go. I’ve never seen anything like it before. It feels like a significant waste of the companys training investment and sends a discouraging signal to future apprentices.
I always found a good way to look at a job is as an independent consultant would. The person/company needs you to accomplish specific tasks. When those tasks are complete, the job is over, unless new tasks that require your services arise. This is, in essence, what a job originally is/was.
It may seem simple, but it gives you a completely different perspective.
I disagree with this for 2 reasons 1) stability is not guaranteed 2) big money can be really big when you factor in bonus and stock. In my experience there is a ~3 year acceleration for every year (I am talking VP level at US stock listed companies for context)
In 2028, UBS managed to fire the entire class of University Graduates that it had invested I don’t know, 1.5 years of salary, training, international stages, … but didn’t offer any of them a permanent job with UBS (given hiring freeze). Its the first time you see it, its not that something fundamentally changed. This pattern comes and goes every few years.
9 months until the labour market gets better again, but with pressure on salaries. It will take 3-5 years until salaries have come down the 30% stated. New recruits will be 30% cheaper, afer 5 years the workforce is 30% cheaper.
I am not talking about blue collar jobs but white collar jobs in mid/large corporates.
Well in 5 years I will definately have forgotten about your comment.
Is 30% the average reduction for all white collar jobs? Do you expect some distributional effects?say if one segment will see growth, would another perhaps see more than a 30% reduction?
Also is this real or nominal? Perhaps you’re expecting 30% cumulative inflation over the next 5 years?
I Have a question related to EMF for you guys working on banks.
You are not allowed to have your money by IBKR. I think a big chunk of people here almost don’t have any cash and count on margin loan for emergencies.
What about you guys? Does the banks offer any favourable conditions for lombard loan? Most of the time it’s 30 or 50k minimum and not instantly like a margin by IBKR.
Anyway like stated above don’t take shortcut and avoid to much leverage with UPRO because everytime you buy the market tank
I can overdraw my account with 4.2% interest. Lombard loans with 1.x% are available starting at 50k or 100k. Good point, I’m actually going to ask right now to know my options.
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