UBS to slash another 2,000 jobs
Swiss bank UBS said Friday that it plans to cut an additional 2,000 investment banking jobs, bringing the total headcount reduction to 6,000 over the past year.
After the cuts, the company’s investment banking workforce will total 17,000. The layoffs are part of the bank’s efforts to revamp its operations to help shore up its balance sheet. Just Thursday, UBS said it expected to return to profitability in the third quarter.
The bank has been among the hardest hit during the crisis because of its exposure to distressed assets and has recorded billions of dollars in writedowns over the past year.
"The ongoing crisis in the financial markets and dramatically changed industry dynamics require us to recalibrate our business," said UBS Chief Executive Jerker Johansson, in a statement. "While the revenue outlook is uncertain, these measures will allow us to focus on our strengths, reduce the cost base to a more sustainable level and position our core businesses for growth once fundamentals improve."
The company said it will exit the commodities business, with the exception of precious metals, and will "substantially downsize" its real estate and proprietary trading units (quick payday loans).
In August, UBS reached a settlement with New York state Attorney General Andrew Cuomo, the Securities and Exchange Commission and other state regulatory agencies who had charged UBS with falsely marketing and selling auction rate securities to average investors during a time when those assets were increasingly high risk.
Auction rate securities are long-term corporate or municipal bonds that are sold at weekly or monthly auctions. The market for these instruments began to fail in February as the financial crisis deepened.
Under the settlement, UBS agreed to buy $8.3 billion of the now illiquid auction rate securities from most private clients over a two-year period. Additionally, the bank said it would buy any of the remaining $10.3 billion held by institutional clients. UBS also agreed to a $150 million fine and to repay clients for losses.
Filed under: finance by Forest