Swiss bank UBS will cut 10,000 jobs as it exits from its fixed-income trading business and tries to cut costs and concentrate on wealth management.
The Zurich, Switzerland-based institution, which stated that it is “significantly reshaping its investment bank,” said it will bring its head count to 54,000 by 2015 from 64,000 employees currently. Some 2,000 cuts will come from UBS front-office workers who deal directly with clients.
In total, that’s a 16 percent slice off the overall workforce. At its height, UBS employed 83,500 workers in 2007. It was unclear Tuesday whether the cuts would affect employees in Maine.
The news of the coming job cuts revived an old joke that the name UBS stands for “U’ve Been Sacked,” as many said they only discovered they’d been laid off when their building security passes were deactivated, according to the Financial Times.
The bank plans to abandon its fixed-income segment, which it said was “rendered uneconomical by changes in regulation and market developments.” Instead, UBS said it will restructure to focus on its advisory, research, equities, precious metals and foreign-exchange sectors.
The three-year slim-down, part of a cost-cutting plan first announced last year, will help save 3.4 billion Swiss francs, or $3.6 billion, according to the bank. The effort will also involve shrinking UBS’s real estate footprint.
“The business model we are creating will be unique in the banking industry,” said Group Chief Executive Sergio P. Ermotti in a conference call with analysts. “UBS will be less capital- and less balance-sheet intensive, highly cash-flow generative, more focused on serving our clients and capable of maximizing value for our employees and shareholders.”
The institution, which along with its peers has had to contend with the European debt crisis, is trying to scale back its exposure to risk and adjust to tighter financial laws.
“The trend toward increased regulation for banks is not going away, although the rules are unlikely to be applied consistently around the world,” Ermotti said. “Higher capital and tighter leverage requirements will put pressure on banks’ returns for years to come and reduce the long-term profitability of investment banks as they are currently structured.”
UBS suffered a loss of 2.2 billion Swiss francs, or $2.3 billion, in its third quarter. During the same period a year earlier, the bank’s net income was 1 billion francs, or $1.1 billion.
The bank has also had to shield its reputation from the fallout of rogue trader Kweku Adoboli, who is accused of gambling away some $2.2 billion dollars. Adoboli told a London jury this week that he “lost control in the maelstrom of the financial crisis,” according to the BBC.
Distributed by MCT Information Services
Yo ho hoand a bottle of Rum!!! Hoist the main sail!!
Banking, dairy and paper businesses continue to die in Maine. There are not many career paths left here. The exception might be becoming a minister to conduct gay weddings! Check with your local universalist, episcopalian or other kook organization for more information.
Your correct that business continues to die, but your wrong if you think it’s the fault of the people who are going to be fired.
Think about it. How many of the 10,000 did all the right things…got educated…worked hard…produced results, yet because of bad decisions by a handful of people at the top(who will be rewarded with millions) …10,000 people, 16% of the workforce will have their lives ruined.
All of these people will no doubt be applying for unemployment and some of them may end up on welfare or need medical assistance and the tea party will complain and blame them for being lazy and not taking responsibility for their lives.
Business will continue to die in Maine. Not understanding the reasons why and obstructing effective corrective measures will only insure that the race to the bottom will accelerate.
Mitt must have made a really big withdrawal to pay for all those lame commercials he’s been running. Now Swiss Bank UBS needs to lay off workers and do more of their banking electronically through China. Wouldn’t it be ironic if the bank told HIM that HIS savings had vanished. Then for once in his life he’d get an inkling of what it’s like to be one of us.
Close.
It seems that Mitt was among the many hiding his money in a numbered Swiss account who took advantage of the “amnesty” if he fessed up and paid the tax owing, plus a modest penalty.
The rules are just diffferent for the rich.
This is why he won’t release all his tax returns. They show the fine he paid to avoid prosecution for defrauding the country.
So that he could then say, “I’ve followed all the rules (corruptly developed for people like me by people like me) and paid all my legal taxes.” God help all of us who aren’t in the top 1-2% if this twitt gets into the highest office in the land. It’ll be like having another 4-8 years of George W. Bush.
It will be worse.
The bank plans to abandon its fixed-income segment, which it said was “rendered uneconomical by changes in regulation and market developments.”
Awww, not worth milking them anymore? What a shame.
What do you want to bet that it will be the oldest, sickest 10,000 that go?
I would love to be a fly on the wall at that board meeting. “ok, Mr. CEO what your telling us is that the plan you gave us last year, that didn’t mention the disposal of 10,000 people…didn’t work. You failed to produce your business objective…your numbers were wrong…you failed. So here’s a nice bonus to go along with your stock options, which you’ll be able to cash in at huge profit because the stock value will go through the roof once we get rid of all this dead weight”
“just make sure the confidentiality contracts with the 10,000 are up to date, we don’t want any whistle blowers telling the world what a bunch of screw ups in fancy suits we are.”
Don’t worry about any blow back from the sheeple. They’re accustomed to being used as fodder and by the time they wake up, anything of value will already be gone.
Hopefully bonuses for the leadership of UBS will not be reduced…whew.
What is Bill Clinton going to do with the Billons donated to his Library from countries his wife vists to conduct US business with