News Column

Report: Swiss bank UBS plans to cut up to 10,000 jobs

Oct. 28, 2012

Zurich/London (dpa) - Swiss banking giant UBS AG plans to cut up to 10,000 jobs by 2015 as part of its restructuring plans, German magazine Spiegel reported Sunday.

Zurich-based UBS, one of the banking sector's biggest losers as a result of the financial crisis that started in 2007, has indicated it will move away from investment banking to focus on servicing wealthy people.

The company, which has a worldwide workforce of 63,000, is expected to announce its strategy along with third quarter results on Tuesday.

The Financial Times, citing source close to negotiations, first reported on the cuts on Friday. If implemented, they would reduce the company's workforce by some 16 per cent.

UBS Group CEO Sergio Ermotti and board chairman Axel Weber have for some time been driving the restructure bid.

Spiegel's report said the company would split off its investment banking unit. The move would involve assets such as bonds and derivatives worth more than 100 billion francs (107 billion dollars) that carry a high risk.

The company's operations in London, New York and Switzerland are expected to be particularly affected by the job cuts.

The UBS workforce has shrunk by some 20,000 since the beginning of 2008. The company made a loss of around 28 billion francs in 2007-2008 and, along with Credit Suisse, required a government bailout to avert a collapse.

UBS has had to raise capital on four occasions since and had to contend with a tax fraud case brought by authorities in the United States that has tarnished its global image.

Ermotti has said he wants to accelerate the plans of his predecessor Oswald Gruebel. These include the shedding of jobs, especially in the investment banking sector.

Gruebel in August 2011 announced plans to reduce costs by 2 billion francs by 2013 and cut 3,500 jobs. He was forced to step down shortly after that in the wake of a rogue trading in the UBS investment unit that led to a loss of some 2.3 billion dollars.

A few months later, Ermotti said the company would shed 400 investment banking jobs.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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