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UBS is cutting around 10,000 jobs globally up until 2015, the Swiss bank said on Tuesday, confirming reports that it was planning to drastically slim down it’s investment banking division, cut costs and focus on its profitable wealth management business, as it continues to combat challenging conditions particularly in Europe.
UBS said that by 2015 its global head count would fall to around 54,000 from 64,000, as part a cost cutting drive that will save the bank around 3.4 billion Swiss francs a year.
“This decision has been a difficult one,” said CEO Sergio P Ermotti, adding that the some reductions would come from natural attrition. “We will take whatever measures we can to mitigate the overall effect.”
The changes largely centre on its investment banking division, which will be scaled down to focus on advisory work, research, equities, foreign exchange and precious metals. Much of its fixed income business – which had been made uneconomical by changes in regulation as well as market conditions – will be gradually wound down.
The news came as UBS reported a net loss of 2.2 billion Swiss francs for the quarter ending in September, as it took an impairment charge totaling 3.1 billion Swiss francs resulting from the restructuring of its investment banking division. The bank had made a profit of 1 billion Swiss francs in the same period the year before.
While the bank would be taking “decisive action” to position the bank for future success, the bank was cautious in its outlook for the current quarter, warning that the degree of progress in resolving the euro zone debt crisis, progress with reforming its banking sector and geo political tensions would have a strong influence on client confidence. “Failure to make progress on these key issues would make further improvements in prevailing market conditions unlikely,” it warned.
Already laid off
The cuts were already well underway on Tuesday, with several British papers including The Times reporting that a number of London-based traders were unable to use their passes for the building.
Some employees took to Twitter. “Standing in a pub where everyone around me has just been made redundant, might join them!” tweeted one.
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