The major European bank UBS has announced it will cut 10,000 jobs worldwide. This is an attempt by the bank to reduce its costs. The restructuring is a result of the bank's exposure to the global financial crisis.
UBS is based in Zurich. The name "UBS" was originally an abbreviation for the Union Bank of Switzerland. UBS operates in more than 50 countries and has about 65,000 employees globally
Like many European banks it consists of a private banking arm and an investment banking arm. It is with the more riskier investment banking that UBS lost money and it is that side of its operations that it is seeking to scale back. UBS suffered among the largest losses of any European bank during the sub-prime mortgage crisis and the bank was required to raise large amounts of outside capital.
During the peak of the global financial crisis UBS lost $42 billion. The current restructuring is aimed at saving only a few billion ($3.6 billion); it will take much longer for the bank to recover its former position in the financial sector.
According to a UBS statement, the 10,000 jobs represents around 16% of the bank's workforce. The loss of jobs will be phased over a three year period. For some, however, The Guardian reports, job losses were immediate with some 100 investment bankers in London told that they were no longer needed.
UBS chief executive Sergio Ermotti is quoted by the BBC as saying: "This decision has been a difficult one, particularly in a business such as ours that is all about its people. Some reductions will result from natural attrition and we will take whatever measures we can to mitigate the overall effect."
According to The Financial Times, the move will leave UBS’s operations focused on its wealth management business with only a small investment bank that will specialize in equities trading.