UBS announces 10,000 jobs to be cut

Oct 30 2012

More British banking jobs are at risk after UBS said it is to cut up to 10,000 roles worldwide in moves to shrink its investment banking arm.

The Zurich-based bank plans to reduce its headcount from 64,000 to 54,000 by 2015, with some 75% of the losses made outside Switzerland.

UBS, which has around 6,500 staff in London, said the restructuring would deliver savings of 5.4 billion Swiss francs (£3.5 billion) by 2015.

The bank, which wants to shift focus away from investment banking operations, reported a 40% slide in pre-tax operating profits to 2.3 billion Swiss francs (£1.5 billion) in the six months to June 30.

Chief executive Sergio Ermotti announced the plans on Tuesday as part of the Zurich-based bank's third quarter results. Mr Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be significant global player in its core businesses".

Ahead of the cuts, the value of UBS's stock rose 7.3% to close at 13.12 Swiss francs (£8.73) in Monday on the Zurich exchange.

The bank posted a net profit loss of 2.17 billion Swiss francs (£1.44 billion), compared with a profit of 1.02 billion Swiss francs (£679 million) during the same three-month period through September 2011.

In what it called "a significant acceleration" in its transformation, the Zurich-based bank said it would sharpen its focus on the investment bank and appoint a new executive to lead it.

Mr Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be a significant global player in its core businesses".

The bank attributed some of the declining profit to a pretax charge of 863 million Swiss francs (£574 million) linked to an accounting rule on how banks must value their debt.