The loss of jobs in the financial sectors in New York, London, Switzerland, Tokyo...3rd inning at best.
UBS to Cut 7,500 Jobs After First-Quarter Loss, Asset Outflows
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By Elena Logutenkova
April 15 (Bloomberg) -- UBS AG, Switzerlandâs biggest bank, said it will cut an additional 7,500 jobs after reporting a loss and outflows of client funds in the first quarter.
The bank will reduce the number of employees globally to 67,500 in 2010 from the previous target of 75,000, Zurich-based UBS said in a statement today. UBS had a loss of almost 2 billion Swiss francs ($1.75 billion) in the first quarter.
Chief Executive Officer Oswald Gruebel, who was called out of retirement in February, told employees last month that theyâll have to face cost cuts as he tries to make the bank financially independent from the government amid an âicy headwindâ from market turmoil. UBS, which has racked up more credit-related writedowns than any other European bank, has raised more than $32 billion from investors including the Swiss government. It has also cut 11,000 jobs in the past 18 months.
âItâs back to basics,â said Andy Lynch, who helps manage about $5 billion at Schroder Investment Management Ltd. in London. âUBS, in common with every other financial institution, is looking to cut costsâ and will probably cut back in trading while focusing on its âprivate banking heritage.â
UBS has fallen 11 percent this year in Swiss trading, cutting the companyâs market value to 38.9 billion Swiss francs. That compares with a 2.1 percent gain in the 65-member Bloomberg Europe Banks and Financial Services Index.
Financial institutions worldwide announced almost 300,000 job cuts since the beginning of the credit crisis as writedowns and losses swelled to $1.3 trillion.
âExtremely Cautiousâ
Goldman Sachs Group Inc. Chief Financial Officer David Viniar said yesterday the U.S. bank remains âcautious about the near-term outlookâ after reporting a first-quarter profit that exceeded the most optimistic Wall Street estimates, helped by trading in fixed-income, currencies and commodities.
UBS last month posted a 20.9 billion-Swiss-franc loss for 2008, the biggest-ever by a Swiss company, and said it remains âextremely cautiousâ about the outlook for this year. The bank amassed more than $50 billion in writedowns and losses since the beginning of the financial crisis. At the end of March it employed 76,200 people.
Gruebel hired Ulrich Koerner earlier this month as chief operating officer to cut administrative expenses, tapping a former colleague who helped him turn around Credit Suisse Group AG six years ago.
UBS said yesterday it will eliminate about 240 jobs from its wealth management unit in the Asia-Pacific region, about 3 percent of the staff in the area, as the credit crisis erodes the spending power of its clients.
Shareholders at UBSâs annual investor meeting in Zurich will today vote on a proposal to appoint former Finance Minister Kaspar Villiger as chairman of UBSâs board of directors. He will replace Peter Kurer, who quit after a year in the job amid a probe into whether UBS helped wealthy Americans evade taxes.
The bank will also ask shareholders for permission to increase share capital by as much as 10 percent if necessary. Michel Demare, Ann Godbehere and Axel Lehmann will also be nominated as directors. Demare has been chief financial officer of ABB Ltd., the worldâs largest builder of power grids, since 2005. The U.K. government installed Godbehere as CFO of Northern Rock Plc after nationalizing the lender in February last year. She is a former CFO of Swiss Reinsurance Co. Lehmann is chief risk officer of Zurich Financial Services AG.
To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net
Last Updated: April 15, 2009 01:26 EDT
UBS to Cut 7,500 Jobs After First-Quarter Loss, Asset Outflows
Share | Email | Print | A A A
By Elena Logutenkova
April 15 (Bloomberg) -- UBS AG, Switzerlandâs biggest bank, said it will cut an additional 7,500 jobs after reporting a loss and outflows of client funds in the first quarter.
The bank will reduce the number of employees globally to 67,500 in 2010 from the previous target of 75,000, Zurich-based UBS said in a statement today. UBS had a loss of almost 2 billion Swiss francs ($1.75 billion) in the first quarter.
Chief Executive Officer Oswald Gruebel, who was called out of retirement in February, told employees last month that theyâll have to face cost cuts as he tries to make the bank financially independent from the government amid an âicy headwindâ from market turmoil. UBS, which has racked up more credit-related writedowns than any other European bank, has raised more than $32 billion from investors including the Swiss government. It has also cut 11,000 jobs in the past 18 months.
âItâs back to basics,â said Andy Lynch, who helps manage about $5 billion at Schroder Investment Management Ltd. in London. âUBS, in common with every other financial institution, is looking to cut costsâ and will probably cut back in trading while focusing on its âprivate banking heritage.â
UBS has fallen 11 percent this year in Swiss trading, cutting the companyâs market value to 38.9 billion Swiss francs. That compares with a 2.1 percent gain in the 65-member Bloomberg Europe Banks and Financial Services Index.
Financial institutions worldwide announced almost 300,000 job cuts since the beginning of the credit crisis as writedowns and losses swelled to $1.3 trillion.
âExtremely Cautiousâ
Goldman Sachs Group Inc. Chief Financial Officer David Viniar said yesterday the U.S. bank remains âcautious about the near-term outlookâ after reporting a first-quarter profit that exceeded the most optimistic Wall Street estimates, helped by trading in fixed-income, currencies and commodities.
UBS last month posted a 20.9 billion-Swiss-franc loss for 2008, the biggest-ever by a Swiss company, and said it remains âextremely cautiousâ about the outlook for this year. The bank amassed more than $50 billion in writedowns and losses since the beginning of the financial crisis. At the end of March it employed 76,200 people.
Gruebel hired Ulrich Koerner earlier this month as chief operating officer to cut administrative expenses, tapping a former colleague who helped him turn around Credit Suisse Group AG six years ago.
UBS said yesterday it will eliminate about 240 jobs from its wealth management unit in the Asia-Pacific region, about 3 percent of the staff in the area, as the credit crisis erodes the spending power of its clients.
Shareholders at UBSâs annual investor meeting in Zurich will today vote on a proposal to appoint former Finance Minister Kaspar Villiger as chairman of UBSâs board of directors. He will replace Peter Kurer, who quit after a year in the job amid a probe into whether UBS helped wealthy Americans evade taxes.
The bank will also ask shareholders for permission to increase share capital by as much as 10 percent if necessary. Michel Demare, Ann Godbehere and Axel Lehmann will also be nominated as directors. Demare has been chief financial officer of ABB Ltd., the worldâs largest builder of power grids, since 2005. The U.K. government installed Godbehere as CFO of Northern Rock Plc after nationalizing the lender in February last year. She is a former CFO of Swiss Reinsurance Co. Lehmann is chief risk officer of Zurich Financial Services AG.
To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net
Last Updated: April 15, 2009 01:26 EDT