30 October 2012 Last updated at 09:38 ET
UBS Chief executive Sergio Ermotti: “The whole bank must become more efficient”
Swiss bank UBS has announced it is cutting 10,000 jobs worldwide as it tries to cut costs and slims down its investment banking activities.
The jobs will go over the next three years, and amount to 16% of its current workforce of 64,000, the bank said.
The bank would not comment on where the jobs would go.
But a source confirmed that 100 traders in London were sent home after being told that the part of the business they worked for was ceasing operations.
It is understood that they were met at reception by staff from HR who told them they were going to be made redundant.
They will receive full pay and benefits for the next three weeks in lieu of notice.
It is standard practice that bank employees are prevented from trading the moment they are informed that they are losing their jobs and are only able to collect any belongings under supervision.
UBS currently employs just over 6,600 staff in the UK.
‘Difficult decision’
UBS lost 39bn Swiss francs (£26bn; $ 42bn) during the financial crisis and had to be bailed out by the Swiss authorities. The cuts are aimed at saving 3.4bn Swiss francs.
UBS chief executive Sergio Ermotti said: “This decision has been a difficult one, particularly in a business such as ours that is all about its people.
“Some reductions will result from natural attrition and we will take whatever measures we can to mitigate the overall effect.”
Zurich-based UBS will focus on its private bank and a smaller investment bank, ditching much of the riskier trading business which was responsible for the bulk of its losses.
In a joint letter to shareholders, chairman Axel Weber and chief executive Mr Ermotti said: “We will no longer operate to any significant extent in businesses where risk-adjusted returns cannot meet their cost of capital.”
UBS announced its restructuring plans as it reported its results for the third quarter of the year.
The bank reported a net loss of 2.17bn Swiss francs for the July to September period, compared with a profit of 1.02bn Swiss francs a year earlier. The loss was mainly due to an impairment charge of 3.1bn Swiss francs that UBS is taking to cover the cost of the changes to its investment bank.
UBS was one of the banks hardest hit during the global financial crisis.
BBC News – Business
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