UBS Said to Widen Job Cuts to 400 at Investment Bank

UBS AG (UBSN) is preparing another round of job cuts across its investment bank in Europe as Chief Executive Officer Sergio Ermotti tries to overhaul the firm, two people with knowledge of the matter said.

UBS is considering cuts in equities and fixed income as it trims its merger advisory staff, bringing total reductions to about 400, or 10 percent of the unit’s front-office employees in the region, said the people, who asked not to be identified because the review is private. The cuts are part of plans to pare back headcount globally, said one of the people.

Ermotti, 52, said in a memo to staff last week he will take “all actions necessary to tackle the current challenging market environment and paradigm shift” in banking and will continue “remodelling” UBS. The Zurich-based firm, which said last year it would trim about 1,600 jobs at the unit, has already reached the staffing goal it set for the end of 2013 as the bank shrinks its securities business to concentrate on wealth management.

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.

UBS to Axe 5,000 Jobs, Credit Suisse to Cut 1,000

ZURICH - UBS is set to cut around 5,000 jobs to save 1 billion Swiss francs ($1.20 billion) while rival Credit Suisse is planning to axe about 1,000 staff, Swiss newspapers reported on Thursday.

Citing an unnamed UBS insider, the Tages-Anzeiger daily said the precise details of the cost-cutting programme still had to be agreed and approved by the board, but should be announced in conjunction with the bank's second-quarter results on July 26.

The newspaper had already reported on Tuesday that thousands of jobs were threatened at UBS and rival Credit Suisse , without giving precise figures.

UBS declined to comment but wealth management head Juerg Zeltner was quoted last week as saying the bank needs to rein in costs given tough market conditions while chairman Kaspar Villiger also said cost cuts were inevitable.
Meanwhile, Credit Suisse is set to cut about 1,000 jobs to save 800 million francs, the Handelszeitung newspaper reported on Thursday, also citing an unnamed insider. The paper said the bank would announce its plans along with its results on July 28.

A Credit Suisse spokesman declined to comment beyond reiterating the bank's standard position that it is always reviewing resource deployment and adjusting its business to market conditions and the needs of its clients.

The Handelszeitung quoted an insider as saying UBS was planning to save about 90 million francs annually by closing 27 offices in Zurich and concentrating staff in five big centres.
Switzerland's biggest bank, which had to be rescued by the state in 2008 after massive losses on toxic assets, slashed staff to around 64,000 from around 78,000 before the financial crisis, but it expanded again in the last year to over 65,000.

Personnel costs have risen sharply as UBS has increased fixed salaries to attract and retain staff given its relatively low bonuses, capped after public outrage during the crisis. It has also hired aggressively in the growth markets of Asia.

A tough second quarter for investment banking earnings, dragged down by sovereign debt woes in Europe and trading jitters, is prompting many banks to cut jobs.

Like other global banks, UBS and Credit Suisse are suffering from sluggish markets, but they face the added burden of high cost bases in Switzerland as the safe-haven Swiss franc soars to new record highs against the dollar and the euro.

The strong franc, boosted by concerns over high government debts in the euro zone and the United States, has prompted many Swiss companies to warn their margins are suffering.
UBS has already said it will cut about 500 technical staff, or nearly 6 percent of its IT workforce.
Analysts said UBS is likely to cut staff at its Investment Products and Services unit, set up in 2010 to provide products to the bank's wealthy clients, where there have been concerns about efficiency after more than 2,000 staff were hired.