Zurich: Switzerland’s biggest bank UBS on Wednesday said it would slash 8,700 jobs in a bid to “make substantial cost savings” amid fresh losses for the first three months of this year.
The bank, which has been struggling to recover after losing billions in the financial and economic crisis, said its losses for the first quarter reached about two billion francs (€1.32 billion euros, $1.75 billion).
As a result it is seeking to “realize substantial cost savings in all areas.”
“Major job cuts are unfortunately unavoidable. UBS expects to reduce the number of its employees to about 67,500 in 2010,” said the bank, which employed 76,200 people at the end of March.
The latest round of job cuts comes on top of 11,000 which have been announced since October 2007, and would help the bank trim its costs by up to four billion francs.
Even as the bank downsizes, the bank’s new chief executive Oswald Gruebel warned that the bank was not out of the woods.
“But you should not assume that this will bring about a marked improvement in our results as early as the next few quarters. Our outlook remains cautious and we face many uncertainties,” he said in a speech to be delivered to shareholders during the bank’s annual general meeting later today.
The bank said it has yet to stem an outflow of funds, as its net money outflow for the Wealth Management and Swiss Bank division reached some 23 billion Swiss francs.
“The outflow was mainly recorded after the announcement of the agreement in connection with the investigation into our cross-border activities for US clients,” said Gruebel.
One of the biggest challenges faced by UBS is in the United States, where the bank still faces a US government lawsuit to recover the details of some 52,000 US customers suspected of tax offences.
The bank was forced to pay $780 million to US justice authorities in February to settle other charges of assisting tax fraud.
Gruebel acknowledged recent attempts by countries including the US, Germany and France to clamp down on tax cheats, and said UBS was “under particularly close scrutiny in this regard.”
“The operating conditions for cross-border wealth management will change, and this will affect how our clients act. We shall make sure that this does not catch us unprepared,” he said.