UBS employees exit the UBS headquarters in London, yesterday. The bank is expected to lay off employees from its London offices.
ZURICH: Swiss bank UBS unveiled plans yesterday to fire 10,000 staff and wind down its fixed income business, returning to its private banking roots as it adapts to tough capital rules that make it harder to turn a profit from trading.
Zurich-based UBS will focus on wealth management and a smaller investment bank, ditching much of the trading business that ran up $50bn in losses in the financial crisis. Some UBS staffers took to social media to air their frustration after dozens of traders were stopped from entering the bank’s London offices yesterday.
Some staff turned up to work to find their employee cards no longer worked at the turnstile and were then escorted to human resources, according to various sources within the bank. Once at human resources, they received their personal items in a bag with a letter saying they would have two weeks paid leave, after which they were to return to pick up their redundancy package, the sources said.
Chafing at their brusque treatment by the Swiss bank, several tweeters revived “U’ve Been Sacked,” an invented acronym for UBS which circulated in 1998 after the bank fired hundreds of staff following the merger of the two big Swiss banks which formed today’s UBS.
Chief Executive Sergio Ermotti, a former Merrill Lynch and UniCredit banker, is leading the three-year overhaul aimed at saving 3.4bn Swiss francs ($3.6bn), on top of cuts of 2bn francs.
Former investment bank co-head Carsten Kengeter will lead the isolation and winding down of its fixed-income activities that are no longer profitable as a result of strict capital rules on riskier business introduced after the financial crisis.
The remaining investment bank —handling equities, foreign exchange trading, corporate advice, and precious metals trading — will be run by Andrea Orcel, a recent Ermotti hire from Bank of America who co-ran the unit with Kengeter until yesterday. “This decision has been hard but it is necessary to create a UBS that is fit for the future,” Ermotti said. “The business model we are creating will be unique in the banking industry.”
The measures translate to a 15 percent staff cut, taking UBS’s overall staff to 54,000, from 63,745 now, already down from a 2007 peak of 83,500 as banks have shed tens of thousands of jobs globally since the financial crisis of 2008.
Of the job cuts, 2,000 will be front-office investment banking staff, the revenue generators. Cuts among support staff will bring the layoffs to above 5,000 in the securities unit alone, Ermotti said in Zurich.
Reuters
