×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

UBS could cut 8,000 jobs in aftermath of loss, write-downs

UBS could cut 8,000 jobs in aftermath of loss, write-downs
Comment E-mail Print Share
First Published: Mon, May 05 2008. 11 47 PM IST

Banking blues: UBS headquarters in Zurich, Switzerland.
Banking blues: UBS headquarters in Zurich, Switzerland.
Updated: Mon, May 05 2008. 11 47 PM IST
Zurich: Switzerland’s biggest bank UBS AG may cut as many as 8,000 jobs as it grapples with the biggest credit write-downs of any European bank and a 12 billion Swiss franc (Rs46,178 crore) first-quarter loss.
The bank, which had a 3 billion franc profit a year earlier, is set to spell out plans for layoffs when it reports detailed results on Tuesday.
Banking blues: UBS headquarters in Zurich, Switzerland.
The company will probably say it’s eliminating between 2,500 and 3,000 jobs in its investment bank, more than 10% of the division, two people familiar with the matter said on 2 May.
“UBS is scaling down investment banking,” including reducing trading bets and giving up off-balance sheet units, said Frankfurt-based Landsbanki Kepler analyst Dirk Becker, who advises clients to “reduce” holdings of UBS. It is “realistic” to estimate that the company will fire one-tenth of its 83,000 employees overall, he said.
Write-downs at the Zurich-based bank after the US subprime mortgage meltdown have swelled to $38 billion over the past three quarters, a result of building a debt securities business at the peak of the market. Chairman Marcel Ospel, who replaced half of the executive board since losses began in 2007, stepped down last month. UBS already cut 1,500 jobs late last year.
UBS rose 20 centimes, or 0.5%, to 37 francs by 9.01 am in Swiss trading. It has lost 50% in the past 12 months, making it the fifth-worst performer in the Bloomberg Europe Banks and Financial Services Index of 59 stocks.
The bank got shareholder approval last month to raise 15 billion francs in a rights offer after receiving 13 billion francs from investors in Singapore and West Asia in March.
“They’ve got to do something to win back the trust of shareholders,” said Peter Thorne, an analyst at Helvea in London with an “accumulate” recommendation on the shares.
“I wouldn’t be surprised if it’s more” than 8,000 layoffs, he said. New York-based spokesman Doug Morris declined to comment.
Credit Suisse Group, Switzerland’s second biggest bank, and Deutsche Bank AG, Germany’s biggest, reported quarterly losses for the first time in five years for the three months ended in March.
Investors are demanding a split of the investment bank from other units.
Comment E-mail Print Share
First Published: Mon, May 05 2008. 11 47 PM IST