UBS AG will reorganise its troubled investment bank, closing most of its commodities business and cut a further 2,000 jobs, the bank said yesterday, responding to the continuing crisis in financial markets.
The news comes a day after the world's biggest wealth manager said it made a small profit in the third quarter after a year of losses, signalling it had started to turn the corner even as the credit crisis engulfs many peers.
The 2,000 job losses come on top of 4,100 investment banking positions cut in the past year as the Swiss bank moved to shore up its financial position after €30 billion of writedowns caused by its US subprime mortgage exposure.
A UBS spokesman said the job cuts would mostly fall in the US 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 jobs represent about 2.5 per cent of UBS's total workforce of about 80,000.
UBS shares were indicated to open up 5.6 per cent, building on strong gains after Thursday's news of a third-quarter profit.
Chairman Peter Kurer launched a radical turnaround plan in August that involved separating UBS's troubled investment bank from its prized wealth management business, stoking speculation it might eventually seek to sell investment banking.
Jerker Johansson, chief executive officer of UBS's investment bank, said UBS was repositioning the business due to the financial crisis, noting that while the revenue outlook was uncertain, the bank wanted to be ready to grow when the turmoil abates.
"A right-sized investment bank, positioned alongside the world's premier wealth management and leading institutional asset management business, will enable UBS to position itself as one of the core group of universal banks that are likely to dominate in this redrawn landscape," he said.
UBS said it will aim to maintain the strengths of its equities business in cash distribution, derivatives and prime services and seek further efficiency gains. It will also continue to provide investment bank clients with strategic advice and access to the capital markets.