UBS to Cut 2,000 More Investment Banking Jobs
UBS said on Friday it is cutting another 2,000 jobs at its troubled investment bank and closing most of its commodities business but will remain a universal bank and will not quit investment banking completely.
The news on Friday comes just a day after the world's biggest wealth manager said it made a small profit in the third quarter after a year of losses, suggesting it had started to turn the corner even as the credit crisis engulfs other banks.
The 2,000 job losses come on top of 4,100 investment banking positions cut in the past year. Forays by the investment bank into risky assets like U.S. subprime mortgages have forced UBS to write down $42 billion -- the most of any bank in Europe.
A spokeswoman said the job cuts would mostly fall in the United States and Britain, but also in Asia and Switzerland.
They would be carried out "swiftly" and mostly through redundancies, with a target completion date of the year end.
The 2,000 new job cuts mean UBS will have reduced its investment banking workforce by about a quarter to 17,000 since peaking in the third quarter of 2007, while the bank will have cut its total headcount by more than 10 percent to under 80,000.
The latest move comes a week after Britain's HSBC announced 1,100 investment banking job cuts and follow tens of thousands of job losses across the global financial industry, which is in its worst crisis since the Great Depression.
UBS's shares were up 2.5 percent at 21.84 Swiss francs at 0932 GMT, when the DJ Stoxx European banking sector index was up 1 percent, and extended Thursday's rally on news that UBS expects a third-quarter profit.
However, the bank's stock price is still down two thirds from a year ago, when it reported its first loss in nine years. It tumbled to 15.18 francs on Sept. 16, its lowest level since listing in its current form in 1998, after Lehman Brothers collapsed.
"The revenue base in the investment bank is probably falling just as fast as the cost base given market conditions.
We doubt that these cuts will be the last," said Helvea's Peter Thorne