Oct. 30 - UBS unveils plans to wind down its fixed income business and fire 10,000 bankers in one of the biggest bonfires of finance jobs since the implosion of Lehman Brothers in 2008. Hayley Platt reports.
The prospect of job cuts at UBS had been widely reported but staff hadn't expected to be sacked immediately. That reportedly happened to dozens of fixed income traders in London after the Swiss bank announced 10,000 job cuts. The axing of 15 percent of the UBS's staff is part of a three-year plan to slim down its investment banking business and concentrate on private banking. Around 2,500 posts will go in Switzerland, the rest in the U.S. and Britain. Sergio Ermotti is the bank's CEO. SOUNDBITE: Sergio Ermotti, Group Chief Executive Officer, UBS, saying (English): "The new business model will be more focussed, aligned to the one integrated bank which will unlock further potential for us to work together as a fully integrated bank." The bank will wind down its fixed income business, ditching the riskier trading side. It ran up losses of $50 billion during the financial crisis prompting a bailout by the Swiss government. UBS trader Kweko Adoboli is also accused of running up a separate $2.3 billion hit. He's currently on trial for fraud and false accounting. But the restructuring is largely the result of tougher capital rules following the financial crisis and advances in technology. The bank hopes to save 3.6 billion dollars on top of existing cuts of 2 billion. Banking analyst Ralph Silva believes UBS won't be the only bank to take drastic action. SOUNDBITE: Ralph Silva, Head of banking strategy, HFS Research, saying (English): "All the major banks should lose about 10-15% of their workforces over the next four or five years. I feel bad for those 10-15% of people because Essentially the shareholders are demanding a more efficient industry and the big banks are following suit." Sacked staff may not like the changes but investors do. UBS shares jumped a further five percent today after a 7 percent rise on Monday - reaching their highest level for a year.