Swiss Bank UBS Slashes 10,000 Jobs
LE TEMPS (Switzerland), THE FINANCIAL TIMES (UK)
ZURICH - Swiss bank UBS officially announced Tuesday it is cutting 10,000 jobs worldwide after losing $42 billion during the financial crisis.
The Zurich based bank, which currently employs 64,500 people, is aiming to reduce its workforce by 2015, Swiss daily Le Temps reports. The bulk of the cuts will be focused on UBS's investment bank.
[rebelmouse-image 27085962 alt="""" original_size="800x532" expand=1]UBS's logo
UBS announced the cuts Tuesday as it reported further losses in the third quarter of this year: a net loss of 2.2 billion Swiss francs.
UBS chief executive Sergio Ermotti said: "This decision has been a difficult one, particularly in a business such as ours that is all about its people.
"Some reductions will result from natural attrition and we will take whatever measures we can to mitigate the overall effect."
UBS contact: "Massacre here today."
— Alice Ross (@aliceemross) October 30, 2012
The bank will therefore refocus its activities on its private business bank and its smaller investment bank, thus moving away from the riskier trade and investment deals that were mainly responsible for the bank's losses.
In a joint statement with chairman Axel Weber, Mr. Ermotti said: "We will no longer operate to any significant extent in businesses where risk-adjusted returns cannot meet their cost of capital."
Huw van Steenis, an analyst for Morgan Stanley, told the Financial Times, "The move is very much a positive – investors want UBS to reveal the value in UBS’s profitable asset and wealth management units and reduce the drag from its underperforming investment banking unit.
“The key questions are what is the viability of the new business, what are the execution risks to the new model, and how many years will it be before UBS can start paying a dividend again,” he added.