Swiss
banking giant UBS AG is to cut as many as 10,000 employees, that is, 15
percent of its staff, to drastically shrink its ailing investment bank.The
news of the layoffs came as Switzerland's biggest bank posted another
big loss for the third quarter. It said Tuesday that the job cuts are
part of a strategy to shore up profits.
As a result, UBS said it needs to reduce its headcount to "around 54,000" by 2015, down from its current 64,000 employees in 57 countries.
Some 7,500 jobs are to be cut mainly in London and the United States. The other 2,500 cuts are to be in Switzerland.
Drama
On Tuesday, the bank began to wind down its fixed income business in London, laying off hundreds of staff.
The cuts began immediately, where about 6,500 employees work in fixed income for UBS. This covers securities such as options, futures and rate derivatives.
About a hundred staff members apparently discovered they had lost their jobs when their identity cards did not work as they tried to get into the office.
Others made it into the building, only to be directed to a holding room, where they were handed their belongings and escorted off the premises. Some senior staff were greeted with a letter at their desks, informing them that they were no longer required.
Sacked
A number of UBS staffers took to social media to air their frustration and several tweeters tweeted 'U've Been Sacked', an invented acronym for UBS which circulated in 1998 after the bank had fired hundreds of staff following the merger of the two big Swiss banks which formed today's UBS.
Broke
UBS CEO Sergio Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be a significant global player in its core businesses."
But tighter industry-wide requirements for banks to increase their capital cushion also have hurt profitability as banks have less cash to invest.
"It can't get better than this point for us to act," he told reporters.
Ermotti, who took over in November after the discovery of unauthorized trading last year, has been downsizing the investment bank to meet stricter capital requirements and shrinking profits due largely to Europe's sovereign debt crisis.
Crisis
Former UBS trader Kweku Adoboli has been facing trial in London this month on charges of committing fraud that cost the bank $2.3 billion. He has told the jury that the losses came after senior traders persuaded him to change from a bearish to a bullish point of view in July 2011.
But the bank also has been under fire on other fronts. In 2008, it was forced to seek a bailout from the Swiss government when it was hard hit by the financial crisis and its fixed-income unit had more than $50 billion in losses.
UBS is one of several global banks being investigated in the U.S. and other countries for alleged rigging of benchmark interest rates known as Libor, or London Interbank Offered Rate.
As a result, UBS said it needs to reduce its headcount to "around 54,000" by 2015, down from its current 64,000 employees in 57 countries.
Some 7,500 jobs are to be cut mainly in London and the United States. The other 2,500 cuts are to be in Switzerland.
Drama
On Tuesday, the bank began to wind down its fixed income business in London, laying off hundreds of staff.
The cuts began immediately, where about 6,500 employees work in fixed income for UBS. This covers securities such as options, futures and rate derivatives.
About a hundred staff members apparently discovered they had lost their jobs when their identity cards did not work as they tried to get into the office.
Others made it into the building, only to be directed to a holding room, where they were handed their belongings and escorted off the premises. Some senior staff were greeted with a letter at their desks, informing them that they were no longer required.
Sacked
A number of UBS staffers took to social media to air their frustration and several tweeters tweeted 'U've Been Sacked', an invented acronym for UBS which circulated in 1998 after the bank had fired hundreds of staff following the merger of the two big Swiss banks which formed today's UBS.
Broke
UBS CEO Sergio Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be a significant global player in its core businesses."
But tighter industry-wide requirements for banks to increase their capital cushion also have hurt profitability as banks have less cash to invest.
"It can't get better than this point for us to act," he told reporters.
Ermotti, who took over in November after the discovery of unauthorized trading last year, has been downsizing the investment bank to meet stricter capital requirements and shrinking profits due largely to Europe's sovereign debt crisis.
Crisis
Former UBS trader Kweku Adoboli has been facing trial in London this month on charges of committing fraud that cost the bank $2.3 billion. He has told the jury that the losses came after senior traders persuaded him to change from a bearish to a bullish point of view in July 2011.
But the bank also has been under fire on other fronts. In 2008, it was forced to seek a bailout from the Swiss government when it was hard hit by the financial crisis and its fixed-income unit had more than $50 billion in losses.
UBS is one of several global banks being investigated in the U.S. and other countries for alleged rigging of benchmark interest rates known as Libor, or London Interbank Offered Rate.
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