Switzerland's 110,000 bank employees fear more bloodletting after UBS AG said it would cut staff by 15 per cent, a move likely to take a heavy toll on an economy heavily reliant on finance and banking.
"Now, you're instantly afraid when someone doesn't answer the phone or answer e-mail," said a Zurich-based trader at a Swiss bank.
"You ask yourself if people you have dealt with as a counter-party for years are just away from their desk, or if they've lost their job."
Out of 10,000 jobs UBS plans to axe in its retreat from fixed income, 2,500 will be cut in Switzerland.
The bank has already shed more than 5,000 jobs in Switzerland after its payroll there peaked at 27,946 in 2008, adding to the tens of thousands of finance jobs globally that have disappeared since the financial crisis.
There is also a question mark over where the axe might fall at hometown rival Credit Suisse Group which is lopping an extra 1-billion Swiss francs ($1.07-billion U.S.) from costs, including by cutting jobs.
"They will almost certainly have to do something as well, and nobody knows yet which departments it would hit first," a Credit Suisse banker told Reuters.
A spokesman for Credit Suisse referred to ongoing cost-cutting measures and streamlining of fixed-income activities.
Switzerland's financial regulator and the central bank have argued that the collapse of a big bank could cripple the Swiss economy, which relies on the banking sector for about 7 per cent of gross domestic product and nearly 6 per cent of overall jobs, according to industry data.
At the same time, Switzerland's $2-trillion offshore private banking industry is being roiled by pressure on banking secrecy, putting fresh pressure on staffing levels.
Up to 10,000 further jobs could be in jeopardy if Swiss banks manage only declared funds and GDP could fall up to 0.3 per cent, Daniel Lampart, chief economist of the Swiss Trade Union Federation said in February.
Swiss private bank Julius Baer will cut up to 1,000 jobs as it seeks to rein in costs following the purchase of Merrill Lynch's international wealth management business.
Swiss regulators have gone further faster than international peers with capital rules designed to curb risky investment banking activities at the two largest banks after UBS was bailed out by the government in 2008.
On Wednesday, Swiss Finance Minister Eveline Widmer-Schlumpf voiced regret at the loss of UBS jobs, but said she welcomed the bank's measures in view of new too-big-to-fail laws.
Shares of Credit Suisse, which earns a greater proportion of profit from investment banking than UBS, have risen 4.5 per cent since it disclosed its spending cuts, compared with a nearly-19-per-cent surge at its rival.
The European Stoxx 600 bank index has risen 3.3 per cent during the same period.
"The more the valuation gap between the two widens, the more investors will push for similar measures from Credit Suisse," Zuercher Kantonalbank analyst Andreas Venditti said.
Switzerland's unemployment rate of less than 3 per cent is the envy of other European countries such as Spain, where it has soared to 25 per cent.
But experts say that bank cuts are expected to hit everyone from rank-and-file employees to highly paid deal makers.
"It's becoming more difficult for people who have lost their jobs at big banks to find a new one," said Denise Chervet, who heads a bank employee lobby organization.
Switzerland's commodities trading firms may snap up banking staff, while specialized staff such as information technology experts are expected to face fewer obstacles in finding new work.
Many former bankers are also hired by the insurance industry, another traditional Swiss economic strength.
"Salaries are probably lower in insurance than in investment banking, but it's also considerably less stressful," said Yngve Abrahamsen, an economist at Switzerland's KOF economic think-tank.