Swiss bank UBS AG is expected to cut up to 10,000 jobs, or 16 per cent of its workforce, as it contends with shrinking revenue and rising capital requirements, a source familiar with the matter said, in what would be one of the largest layoffs by a bank since the financial crisis.
Switzerland's biggest bank is expected to make the cuts across the firm globally, but the bulk of the losses are likely to occur in its hard-hit trading and investment banking areas.
The cuts will accompany a restructuring that will lop off much of UBS' massive fixed-income operations into a separate unit to be wound down over time, according to the Financial Times, which first reported the news.
That unit is expected to be led by Carsten Kengeter, a co-head of the investment bank, the paper said.
Andrea Orcel, who joined from Bank of America this year to work alongside Kengeter in restructuring the trading activities, will run the equities, fixed income, foreign exchange and advisory businesses that will remain active, the paper said. UBS pledged last year to cut more than 5 percent of its workforce, or about 3,500 jobs. The new cuts are expected to supplement that target, the paper said.
UBS, which has more than 60,000 employees, is likely to provide details of the cutbacks when it reports its third-quarter results on October 30, the source said.
The moves are being engineered by Sergio Ermotti, the 52-year-old chief executive who took the top job just 13 months ago. The bank has been withdrawing from the riskier and more capital-intensive parts of its business to meet tighter capital rules and a dearth of deals affecting the securities industry globally. It has said it will dedicate most of its resources to its wealth management, private banking and asset management businesses.
The expected cuts will add to the tens of thousands of jobs the financial sector has shed globally since the crisis of 2008. In the United States alone, financial companies have announced plans to eliminate 28,000 jobs through the first nine months of this year, according to outplacement