UBS restructuring investment banking, likely to cut 10,000 jobs

Written on:October 27, 2012
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UBS job cuts will amount to almost a sixth of its workforce of 63,500

UBS, the largest Swiss bank, is likely to cut 10,000 of its 63,500 staff in the coming years as the Switzerland bank plans to shrink its investment bank and move parts of its fixed income-trading business into a non-core unit.

The announcement of job cuts is likely to coincide with the unveiling of UBS third-quarter report on October 30. If reports are to be believed then, UBS job cuts will be one of the largest layoffs by a bank since the financial crisis.

Sergio Ermotti, the new chief executive of UBS AG, plans to restructure UBS investment banking due to increasing pressure from Swiss regulators on bank to boost capital and shrink their trading and investment-banking operations.

According to the analysts, the shakeup in investment banking might see Carsten Kengeter, the co-Chief Executive Officer of UBS Investment Bank, with reduced role, while his co-head Andrea Orcel getting more responsibilities.

UBS board is expected to meet in New York on Wednesday to mull restructuring of its investment banking unit and also consider jobs cuts due to the fixed-income operations, reports Bloomberg.

The new job cuts are expected to be the addition to the ongoing programme of layoffs announced last year. UBS last year vowed to cut 3,500 jobs to save £1.5 billion.

The UBS job cuts throw light on the changing regulatory and market environment, which is forcing financial companies globally to retrench to reduce expenses.

UBS’ largest Swiss rival, Credit Suisse Group AG, is also overhauling the bank to increase its cost-cutting efforts by 1 billion Swiss francs to save 4 billion francs of by 2015.

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