Fixed income let 100 out of 180 Traders & sales people go. While this may not sound a lot, it is huge change. i have not see that many people from one asset class let go since 1998. We speculate that each of these people will have somewhere between 7 to 8 staff supporting them ( IT, Finance, ops....etc) so there goes another 700-900 people too.
And this is just one sweep of the knife. there will be a lot more cuts..... It will not be pleasent
There is rumour that credit Suisse are not far off making big cuts, followed by morgan stanley
News article just come out
And this is just one sweep of the knife. there will be a lot more cuts..... It will not be pleasent
There is rumour that credit Suisse are not far off making big cuts, followed by morgan stanley
News article just come out
Scores of traders at UBS were locked out of the Swiss bank's London offices on Tuesday as the institution moved quickly to implement the first of thousands of job cuts in a strategic restructuring.
The revamp effectively brings an end to UBS's attempts over the past two decades to build a world-class investment bank, which brought the institution to the brink of collapse in 2008 when it incurred more than $50bn in losses from the fixed-income business that it is now exiting. Instead, UBS's strategy will centre on its private bank, the world's second-largest in assets after Bank of America and a mainstay of the group's earnings.
UBS confirmed Tuesday that it will cut risk-weighted assets by around Sfr100bn ($107bn) by the end of 2017, eliminate about 10,000 jobs across the bank and reorganise its investment bank to deliver more products and services to ultra-wealthy clients at the private bank. The bank also said Tuesday that charges related to the moves, which come in response to a tougher regulatory and economic climate, helped push it into the red in the third quarter.
UBS chief executive Sergio Ermotti said that London would bear the brunt of the cuts as the bank attempts to exit almost completely from fixed-income activities and move back to its wealth-management roots.
"The vast majority of jobs will be lost in London," Ermotti said at a news briefing on Tuesday. Around 2,500 jobs will be eliminated in Switzerland over the next two to three years, a bit more than that in the US and the rest in the UK, he said. In 2015, UBS expects its workforce to be around 54,000, roughly 15% less than today.
UBS, Switzerland's largest bank by assets, later moved to play down the size of the cuts in the UK.
"The exact number outside of Switzerland cannot be precisely broken down yet," a UBS spokesman in Zurich said, after reports about the big cuts sent shock waves through London's financial district.
A cut of thousands of jobs would gut the London operation of the bank, which employs just over 6,600 people.
In London on Tuesday morning, scores of UBS workers found themselves unable to get to their desks when they showed up for work.
A group of UBS traders from the credit capital-markets desk were drinking in a bar near the UBS office in the City of London. "We turned up this morning and the pass didn't work," said one trader. "Doors opened, but you couldn't see your boss and you weren't allowed back to the trading floor."
UBS said it was necessary to take action immediately to protect the bank and make tough decisions on the trading positions to cut.
"When you look at something like [a big round of job cuts], it is difficult and disruptive," chief financial officer Tom Naratil told The Wall Street Journal on Tuesday. "That's true whether you take the decision, or even more so if you are being affected by it. In implementing this decision, we have had to balance how to treat people respectfully with how the firm protects its position."
Although rumours about the cuts had emerged three weeks ago, some traders were caught by surprise at the timing of the layoffs. "I still need to get my stuff. It's at my desk," said one trader, who was about to call his girlfriend and tell her about his dismissal. "It's mainly a few personal things."
Headhunters were already working their way around the pub to help people find new jobs. "It's like Lehman again," said one headhunter. "Except this time it will be harder for them to get recruited again" because of widespread industry cuts in investment banking.
Ermotti said the decision to move ahead with the revamp was made during the summer, when it became increasingly clear that the global economy was worsening, that regulators were getting stricter and tougher demands on capital were here to stay.
However, the foundations for the plan were laid a year ago, when Ermotti told investors that the Swiss bank wanted to focus on servicing its wealth-management, corporate and retail clients and shrink its investment bank.
By 2015, UBS expects to save about Sfr5.4bn annually by reducing staff costs and through other savings, up from the two billion francs-a-year target it set last year. This will help raise the bank's overall return-on-equity to at least 15% from 2015, up from 8.6% in 2011, UBS said.
The changes will take three years to implement and will probably cost about 3.3bn francs in total in restructuring charges over this period.
The bulk of the savings will come from the reduction in the workforce. "This is a people's business," Ermotti said. "If you cut costs, the big part is coming from headcount."
The charges tied to the restructuring pushed UBS earnings into the red in the third quarter. The bank swung to a net loss of Sfr2.17bn from a Sfr1.02bn profit a year earlier, due to Sfr3.1bn in write-downs for goodwill, as well as a so-called own-credit loss of nearly one billion francs. Excluding charges, the bank posted an adjusted profit of Sfr1.4bn.
UBS also expects a loss for the fourth quarter, due to restructuring charges and own-credit losses, and will consequently also record a loss for the full year.
Going forward, the investment bank will concentrate on giving advice to corporate clients, equities trading and research, and foreign exchange. Fixed-income operations, which aren't cost-effective amid regulatory demands for more capital backing, will be dramatically downsized.
The investment bank will see risk-weighted assets fall to about Sfr70bn francs from January as UBS moves big chunks of its fixed-income business into a legacy unit, which will be reported in the corporate center.
Ermotti wants the investment bank to offer products and services – such as sophisticated investment products and access to private-equity deals – to ultra-rich clients at the private bank. The private bank, the world's largest before the financial crisis, has over the past two years begun to recover from a tax-evasion investigation in the US. During the third quarter, clients entrusted it with SFr12bn in net new assets.
The revamp effectively brings an end to UBS's attempts over the past two decades to build a world-class investment bank, which brought the institution to the brink of collapse in 2008 when it incurred more than $50bn in losses from the fixed-income business that it is now exiting. Instead, UBS's strategy will centre on its private bank, the world's second-largest in assets after Bank of America and a mainstay of the group's earnings.
UBS confirmed Tuesday that it will cut risk-weighted assets by around Sfr100bn ($107bn) by the end of 2017, eliminate about 10,000 jobs across the bank and reorganise its investment bank to deliver more products and services to ultra-wealthy clients at the private bank. The bank also said Tuesday that charges related to the moves, which come in response to a tougher regulatory and economic climate, helped push it into the red in the third quarter.
UBS chief executive Sergio Ermotti said that London would bear the brunt of the cuts as the bank attempts to exit almost completely from fixed-income activities and move back to its wealth-management roots.
"The vast majority of jobs will be lost in London," Ermotti said at a news briefing on Tuesday. Around 2,500 jobs will be eliminated in Switzerland over the next two to three years, a bit more than that in the US and the rest in the UK, he said. In 2015, UBS expects its workforce to be around 54,000, roughly 15% less than today.
UBS, Switzerland's largest bank by assets, later moved to play down the size of the cuts in the UK.
"The exact number outside of Switzerland cannot be precisely broken down yet," a UBS spokesman in Zurich said, after reports about the big cuts sent shock waves through London's financial district.
A cut of thousands of jobs would gut the London operation of the bank, which employs just over 6,600 people.
In London on Tuesday morning, scores of UBS workers found themselves unable to get to their desks when they showed up for work.
A group of UBS traders from the credit capital-markets desk were drinking in a bar near the UBS office in the City of London. "We turned up this morning and the pass didn't work," said one trader. "Doors opened, but you couldn't see your boss and you weren't allowed back to the trading floor."
UBS said it was necessary to take action immediately to protect the bank and make tough decisions on the trading positions to cut.
"When you look at something like [a big round of job cuts], it is difficult and disruptive," chief financial officer Tom Naratil told The Wall Street Journal on Tuesday. "That's true whether you take the decision, or even more so if you are being affected by it. In implementing this decision, we have had to balance how to treat people respectfully with how the firm protects its position."
Although rumours about the cuts had emerged three weeks ago, some traders were caught by surprise at the timing of the layoffs. "I still need to get my stuff. It's at my desk," said one trader, who was about to call his girlfriend and tell her about his dismissal. "It's mainly a few personal things."
Headhunters were already working their way around the pub to help people find new jobs. "It's like Lehman again," said one headhunter. "Except this time it will be harder for them to get recruited again" because of widespread industry cuts in investment banking.
Ermotti said the decision to move ahead with the revamp was made during the summer, when it became increasingly clear that the global economy was worsening, that regulators were getting stricter and tougher demands on capital were here to stay.
However, the foundations for the plan were laid a year ago, when Ermotti told investors that the Swiss bank wanted to focus on servicing its wealth-management, corporate and retail clients and shrink its investment bank.
By 2015, UBS expects to save about Sfr5.4bn annually by reducing staff costs and through other savings, up from the two billion francs-a-year target it set last year. This will help raise the bank's overall return-on-equity to at least 15% from 2015, up from 8.6% in 2011, UBS said.
The changes will take three years to implement and will probably cost about 3.3bn francs in total in restructuring charges over this period.
The bulk of the savings will come from the reduction in the workforce. "This is a people's business," Ermotti said. "If you cut costs, the big part is coming from headcount."
The charges tied to the restructuring pushed UBS earnings into the red in the third quarter. The bank swung to a net loss of Sfr2.17bn from a Sfr1.02bn profit a year earlier, due to Sfr3.1bn in write-downs for goodwill, as well as a so-called own-credit loss of nearly one billion francs. Excluding charges, the bank posted an adjusted profit of Sfr1.4bn.
UBS also expects a loss for the fourth quarter, due to restructuring charges and own-credit losses, and will consequently also record a loss for the full year.
Going forward, the investment bank will concentrate on giving advice to corporate clients, equities trading and research, and foreign exchange. Fixed-income operations, which aren't cost-effective amid regulatory demands for more capital backing, will be dramatically downsized.
The investment bank will see risk-weighted assets fall to about Sfr70bn francs from January as UBS moves big chunks of its fixed-income business into a legacy unit, which will be reported in the corporate center.
Ermotti wants the investment bank to offer products and services – such as sophisticated investment products and access to private-equity deals – to ultra-rich clients at the private bank. The private bank, the world's largest before the financial crisis, has over the past two years begun to recover from a tax-evasion investigation in the US. During the third quarter, clients entrusted it with SFr12bn in net new assets.
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