UBS To Cut 10,000 Jobs, Workers Irate [UPDATE]

UBS cuts 10,000 jobs

GENEVA -- Swiss banking giant UBS AG is to cut as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank.

The news of the layoffs came as Switzerland's biggest bank posted another big loss for the third quarter. It said Tuesday that the job cuts are part of a strategy to shore up profits.

As a result, UBS said that it needs to reduce its headcount to "around 54,000" by 2015, down from its current 64,000 employees in 57 countries.

Some 7,500 jobs are to be cut mainly in London and the United States, where UBS has a prominent building and trading operations in Stamford, Conn., near New York City. The other 2,500 cuts are to be in Switzerland.

UPDATE: Tuesday, 2:40 p.m. -- Some UBS staffers were irate as dozens learned of the layoffs only when they showed up to work and were stopped from entering the bank's London offices Tuesday, according to Reuters.

They found their employee cards were no longer working and were then "escorted" to human resources, where they received their personal items in a bag and a letter telling them they'd have two weeks paid leave. Reuters' report said employees took to social media to vent. According to Reuters:

"Chafing at their treatment, several tweeters revived 'U've Been Sacked,' an invented acronym for UBS which circulated in 1998 after the bank fired hundreds of staff following the merger of the two big Swiss banks which formed today's UBS."

The announcement of the job cuts came as the Zurich-based bank posted a loss of 2.17 billion Swiss francs ($2.31 billion) in the third quarter, in contrast to last year' equivalent net profit of 1.02 billion Swiss francs.

UBS blamed the loss on a 3.1 billion francs charge at the investment bank and an 863 million francs hit linked to an accounting rule on how banks must value their debt.

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Banks can post gains if the value of their debt falls, because it would theoretically become cheaper for the bank to repurchase that debt. But the rule also says that when a bank's debt increases, it must take a write-down, because it would theoretically have to pay more to buy back its own debt on the open market.

In what it called "a significant acceleration" in its transformation, the bank said it would sharpen its focus on the investment bank and appoint a new executive, Andrea Orcel, formerly of Bank of America Corp., to lead it. The current co-head of the investment bank, Carsten Kengeter, is stepping down from the group's executive board to unwind the non-core assets.

UBS said that it also plans to save 3.4 billion francs in additional costs through 2015, but that the reorganization will result in restructuring charges of 3.3 billion francs over the next three years, including about a half-billion francs in the fourth quarter.

UBS CEO Sergio Ermotti said the investment unit, which has been hit by a series of costly blunders in recent years, will "continue to be a significant global player in its core businesses."

But tighter industry-wide requirements for banks to increase their capital cushion also have hurt profitability as banks have less cash to invest.

"It can't get better than this point for us to act," he told reporters.

Ermotti, who took over in November after the discovery of unauthorized trading last year, has been downsizing the investment bank to meet stricter capital requirements and shrinking profits due largely to Europe's sovereign debt crisis.

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Former UBS trader Kweku Adoboli has been facing trial in London this month on charges of committing fraud that cost the bank $2.3 billion. He has told the jury that the losses came after senior traders persuaded him to change from a bearish to a bullish point of view in July 2011.

But the bank also has been under fire on other fronts. In 2008, it was forced to seek a bailout from the Swiss government when it was hard hit by the financial crisis and its fixed-income unit had more than $50 billion in losses.

UBS is one of several global banks being investigated in the U.S. and other countries for alleged rigging of benchmark interest rates known as Libor, or London Interbank Offered Rate. In April, Ermotti said Switzerland's tax disputes with the United States and some European nations are "an economic war" putting 20,000 jobs at risk.

Switzerland has been trying to shed its image as a tax haven, signing deals with the United States, Germany and Britain to provide greater assistance to foreign tax authorities seeking information on their citizens' accounts in the Alpine nation.

But the tax agreements have drawn fire from Switzerland's nationalist People's Party, which won more than a quarter of the vote in last year's general election, with some lawmakers saying they will try to block the treaties through referendums.

AOL Jobs contributed to this report.

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I am in business that buys CLOSED companies and liquidates the assets. I buy mostly at liquidation auctions. 10 years age......about 2 per month. 5 years ago .......about 4 per month. 2 years ago......about 4 per week. 1 year ago........about 10 per week. Today..........about 5 per day. Good job Obama, you are generating too much inventory for me to buy. Each of these company locations represent 100 to 200 jobs ........that's 500 to 1000 jobs per day going away. How are you going to feed all of those people Obama. I hear you have some more openings on the Seal team and at the Libyan embassy. Maybe you did not get the word as you were in Vegas boning up on your risk taking.

October 31 2012 at 5:02 PM Report abuse rate up rate down Reply

What! Bank to lay off 10,000! That is CEOs political stunt to scare workers not to vote for President Obama. UBS workers, don't be fooled by those scare tactics by your CEO. He is in love with Mitt Romney - the Mormon who does give a damn about 45% of Americans. Vote for President Obama and you will save your jobs.

October 31 2012 at 1:34 PM Report abuse -3 rate up rate down Reply
1 reply to pmbalele's comment

So I should tell my daughter who was laid off that according to you, it didn't happen?

November 16 2012 at 11:50 AM Report abuse rate up rate down Reply

Seventy-five hundred jobs in the UK and America. Just last month Alpha Resources coal company announced 1200 jobs cut in coal mines. Why? The economy in general for the banks. The Obama severe requirements on the coal industry for the coal miners. Obama has had four years to fix the economy but his answer is that it is George Bush's fault. I don't know about all of you Americans out there but four years is enough for me. My vote goes to Romney. If Obama is re-elected and I hear one whinner, my first question is going to be, "who did you vote for". Prior evidence is all over America and you will have no excuse. So, if you vote for Obama and don't like what you see after the election, keep your mouth shut!!

October 31 2012 at 1:12 PM Report abuse +3 rate up rate down Reply

I heard back in 1974 that there is not enough money to go around. So, some would have to live without money. Now it is the computers pushing people out of work. The American businessman is worse now than before. Think of a dumb excuse, push it hard, get the news to publish it, and expect the people to be dumb enough to go for it. The American businessman creates the American Dream for himself, but greatly adds to the American Nightmare of millions. An American businessman's worth should be measured contextually--if the people around this gifted man are failing, then so is he.

October 31 2012 at 12:23 PM Report abuse +1 rate up rate down Reply

i've got mine ,you get yours mindset ! t.s.

October 31 2012 at 12:01 PM Report abuse rate up rate down Reply

Another sign of a growing economy. Right bho?

October 31 2012 at 11:59 AM Report abuse +1 rate up rate down Reply

Many many of those jobs will now be done by a computer...........THATS WHERE THE JOBS HAVE GONE.

October 31 2012 at 11:12 AM Report abuse rate up rate down Reply

This is not the only company making job cuts in the US, The liberal media just does not want us to hear about them until after the election. Rubbermaid has announced large cuts for 2013. It's only going to get worse. Tell that to the Obama supporters and they will scoff at you. I say let's give Romney a chance. If he does not perform, we will throw him out as well.

October 31 2012 at 10:49 AM Report abuse +5 rate up rate down Reply

Wait till after the election...if Obama stays another 4 years we will have more layoffs...and companies taking a hike from the country...
Let someone else have 4 years...if they can't change things then out they go in 4 years...NO MORE 8 YEARS FOR ANYONE RIGHT NOW>>

October 31 2012 at 10:24 AM Report abuse +4 rate up rate down Reply

Just no loyalty any more. Years ago when corporations were to lay off large numbers of people they would do it more humanely and in person. Today you show up for work and find yourself locked out. This is no way to treat people. When I hear of this type of thing I make a note not to do business with that company if at all possible.

October 31 2012 at 10:14 AM Report abuse +6 rate up rate down Reply
1 reply to reedonald's comment

My first thought is to totally agree with you but then I recall cases where employees were given notice and their response was to sabatage the company and/or poison the moral of the remaining staff. Being forced to layoff employees is never painless no matter the circumstances but is sometimes a necessary process that should be handled with dignity and compassion if at all possible.

October 31 2012 at 10:46 AM Report abuse rate up rate down Reply

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