Swiss bank UBS has announced that it will cut 3,500 jobs as part of a programme that was announced on July 26 this year, following in the footsteps of banks such as Goldman Sachs, Credit Suisse and HSBC.
The job losses are part of UBS’s plans to eliminate expenses of about SFr2 billion from its annual costs by the end of 2013. It intends to do this through redundancies, as well as natural attrition and further real estate rationalisation.
The cuts are not as severe as anticipated; estimates had run as high as losses of 5,000 people. About 45% of the reduction will come from the investment bank, 35% from wealth management and Swiss bank, 10% from global asset management, and 10% from wealth management Americas. The final number of redundancies is subject to employee consultation.
UBS says that the “measures announced today are designed to improve operating efficiency and UBS will continue to be vigilant in managing its cost base while remaining committed to investing in growth areas.
UBS is the latest in a line of banks to reduce headcount to minimise costs. Recently, Swiss rival Credit Suisse announced it will axe 2,000 jobs – about 4% of the bank’s workforce – after profits slumped. Other banks, such as Goldman Sachs, HSBC and Morgan Stanley have also revealed plans to cull jobs.
UBS says it expects to recognise restructuring charges of approximately SFr550 million in connection with its cost reduction plans, approximately SFr450 million of which will be booked in the second half of 2011. It adds that the substantial majority of the expected SFr450 million charge will be recognized in the third quarter of 2011.
The restructuring charges reflect costs related both to personnel (approximately SFr400 million) and to real estate (approximately SFr150 million).
"Increasingly the water-cooler chatter focuses on potential bank lay-offs. Let’s see what the autumn brings for the markets and UBS’s investment bank"
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