UBS to cut 3,500 jobs

UBS will cut about 3,500 jobs as it tries to reduce its annual costs by 2 billion Swiss francs

• Most of the cuts will come from the investment bank business, wealth management and the Swiss bank unit
• It expects to book charges of about CHF550 million as part of the cost reduction plans

ZURICH -- UBS AG UBS -0.58% Tuesday said it will cut around 3,500 jobs as it tries to reduce annual costs by 2 billion Swiss francs ($2.5 billion) in the face weaker earnings, increased regulation and slowing economic growth.

The Swiss banking giant said it expects to incur restructuring charges of around CHF550 million as part of the cost reduction plans, with CHF450 million to be booked mostly in the third quarter of 2011, according to a statement Tuesday.

UBS last month reported second-quarter net profit fell by half and said the increased capital requirements and the stricter regulatory environment in Switzerland, in addition to a worsening economic outlook, mean it is unlikely to meet the three- to five-year profit targets it set in 2009.

UBS's investment bank business will bear the brunt of the job cuts, accounting for 45% of the 3,500 positions to be lost, while the wealth management and Swiss bank unit will account for 35%, it said.

""A surprisingly high proportion of the cuts will be at the wealth management and Swiss banks business, but otherwise there are no big surprises," says Rainer Skierka, an analyst at Bank Sarasin.

Swiss banks are also struggling under the weight of the strong franc, which soared to record highs against the euro and the dollar in recent weeks, prompting the Swiss National Bank to cut interest rates to close to zero, and flood the money market with liquidity to damp investor demand for the currency.

Credit Suisse Group last month said it planned to trim 4% of its workforce to slash spending after disappointing second-quarter results.

Bank of America to slash 3,500 jobs

Bank of America Corp. is planning to cut 3,500 jobs this quarter, the Wall Street Journal reported Friday citing people familiar with the situation. 

The bank will undertake an aggressive overhaul that could result in the elimination of at least 10,000 jobs, according to the report.

BNY Mellon to Cut 1,500 Jobs

BOSTON - Bank of New York Mellon Corp plans to cut about 1,500 jobs, or 3 percent of its workforce, to stem rising expenses.

The job cuts are the latest in the financial industry, as institutions brace for slower-than-expected economic growth.

A spokesman for the New York bank, Kevin Heine, said Wednesday it expects to provide more detail about the job cuts by the end of the year and an exact timetable and the number of layoffs to take place have not been determined.

The bank plans to reduce the total number of layoffs by starting a hiring freeze and through natural turnover, BNY Mellon Chief Executive Robert Kelly said in a statement.
Although the bank's revenue has grown in recent quarters, Kelly said, "expenses have been growing unsustainably faster."

The move is only the latest large layoff by a major bank amid broader economic concerns. Last week Britain's HSBC Holdings Plc said it would cut 30,000 jobs as it pulls back from countries including the United States and Russia.

Other firms have cut smaller numbers of jobs this summer, including BNY Mellon's chief trust bank rival, State Street Corp. On July 19 the Boston company said it would eliminate as many as 850 technology jobs through layoffs and outsourcing.

BNY Mellon had already promised other cost-containment efforts, such as moving employees to lower-cost locations including Pittsburgh; Manchester, England; and India.

Postal Service proposing cutting 120,000 jobs

The financially strapped U.S. Postal Service , facing insolvency as soon as next month, is proposing cutting 120,000 jobs while changing union contracts and employee health and pension benefits.

Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.

Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.

The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff. In its 2010 annual report, the agency said it had 583,908 career employees.

The loss of mail to the Internet and the decline in advertising caused by the recession have rocked the agency.

Postal officials have said they will be unable to make a $5.5 billion payment to cover future employee health care costs due Sept. 30. It is the only federal agency required to make such a payment but, because of the complex way government finances are counted, eliminating it would make the federal budget deficit appear $5.5 billion larger.

In addition the post office recently said it is considering closing 3,653 post offices, stations and other facilities, about one-10th of its offices around the country, in an effort to save money. Offices under consideration for closing are largely rural with little traffic.

And in June the post office suspended contributions to its employees' pension fund, which it said was overfunded.

In its 2010 annual report the post office reported a loss of more than $8 billion on revenues of $67 billion and expenses of $75 billion.

And even while total mail volume fell from 202 billion items to 170 billion from 2008 to 2010 the number of places the agency has to deliver mail increased by 1.7 million as Americans built new homes, offices and businesses.

RIM to cut 2,000 jobs as iPhone market share grows

Research In Motion Ltd., maker of the BlackBerry smart phone, plans to cut 2,000 jobs, or about a tenth of its workforce, as sales slow amid market share losses to Apple's iPhone.

The reductions, across all functions, are part of a plan to "focus on areas that offer the highest growth opportunities," RIM said Monday. The job cuts will leave the Canadian company with about 17,000 employees.

RIM predicted last month that sales this quarter may drop for the first time in nine years. The company is losing market share in the United States to the iPhone and handsets running Google's Android software, in part because it hasn't introduced a major new BlackBerry model since August. Cheaper Google phones are also making inroads in Latin America, Asia and Europe, threatening the popularity of less expensive BlackBerry models like the Curve.

Monday's announcement "takes care of the expenses and they still need to focus on the revenue side," said Alkesh Shah, an analyst at Evercore Partners Inc. in New York. "They need to find a way to make consumers get excited about RIM products. At this point they haven't gotten there."

While RIM had said June 16 it would cut jobs, the figure of 2,000 "is more significant than previously suggested" by co-CEO Jim Balsillie, said Mike Abramsky, an analyst at RBC Capital Markets in Toronto, who rates RIM "sector perform."

When asked about the restructuring plan by one analyst on a June 16 conference call, Balsillie had said: "I would not call it a restructuring and I think that's just radically mischaracterizing it."

HSBC plans to cut 30,000 jobs

HSBC will shed 30,000 jobs as it retreats from countries where it is struggling to compete, Europe's biggest bank said on Monday after it reported a surprise rise in first-half profit.


HSBC will axe 30,000 jobs as it slashes costs and retreats from countries such as Russia, Poland and the U.S., where it is struggling to compete, Europe's biggest bank said after reporting a surprise rise in first-half profit.

HSBC's shares rose as much as 5 percent as first-half pretax profits of $11.5 billion were up 3 percent on a year ago, beating the $10.9 billion average in a Reuters poll.

The London-based bank said it had cut 5,000 jobs after restructuring operations in Latin America, the United States, Britain, France and the Middle East and that it would cut another 25,000 between now and the end of 2013.

That equates to 10 percent of HSBC's 296,000 workforce. The bank's 110,000 staff in Europe and North America will bear the brunt of the job cuts.