UBS flags more job cuts
UBS plans to cut 10,000 jobs globally before the end of the year as the financial giant battles costs.
In a letter to shareholders, the company said 2,500 jobs would go in Switzerland.
It is believed the wealth management arm will lose 4,000 jobs globally, with 2,500 coming from the American operation.
A further 500 jobs in wealth management will go from around the globe.
The move comes as UBS reports a net loss of A$2.4 billion for the first quarter of this year.
The wealth management division globally suffered net outflows of A$28 billion during the quarter as opposed to inflows of A$19.3 billion.
Global asset management outflows slowed to A$9.2 billion as improved performance in areas such as equities helped stimulate inflows, the company said.
To boost the bottom line, UBS plans to cut expenses by about A$4.5 billion before the end of 2010, group chief executive officer Oswald Grubel said.
“We expect that the effect of these measures will start to become visible during the second half of 2009,” he said.
“Our cost-cutting measures are targeted at those areas where they will have the greatest impact.”
Grubel said UBS was reviewing all areas of the business to determine their long-term viability as part of the global financial institution.
“Our decision to streamline certain business areas reflects near-term pressure on revenues as well as expected permanent changes to industry profitability,” he said.
“In wealth management, lower invested assets are coupled with negative trends for margins as clients opt for simpler, lower-risk and lower margin products.”
However, Grubel said UBS remains cautious about the outlook despite recent rebounds in global markets.
“There has been an improvement in market sentiment during the first quarter, with a strong rebound in global stock market indices since early March,” he said.
“But the credit markets have improved only partly and trading in complex financial products remains illiquid.
“Markets continue to be unsettled and we remain cautious on the immediate outlook for UBS.”
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