Swiss bank UBS AG plans to slash about 3,500 jobs, almost half of them from its investment bank, as it seeks to shave some 2 billion Swiss francs from annual costs by the end of 2013.
UBS had already said that it would cut jobs when it posted a lower-than-expected second-quarter profit last month as its underperforming fixed-income business weighed.
Like rival Credit Suisse Group AG, UBS has been grappling with rising regulatory costs and a red-hot Swiss franc which are eating into profits.
“The measures announced today are designed to improve operating efficiency. UBS will continue to be vigilant in managing its cost base while remaining committed to investing in growth areas,” UBS said in the statement yesterday.
About 45 percent of the cuts will come from UBS’ investment bank, 35 percent from wealth management & Swiss bank, 10 percent from global asset management and 10 percent from wealth management Americas.
One Zurich-based trader said UBS’ move was in line with expectations and that this trend was likely to continue as other Swiss banks also struggle with volatile markets.
Credit Suisse has already said it would cut about 2,000 jobs, after weak trading activity and the strong franc hit its second-quarter results.
Just this week, Credit Suisse chief Brady Dougan was quoted as saying the bank is bracing for a volatile time ahead as the franc and low interest rates pressure its revenue.
UBS expects to book a restructuring charge of about SF550 million. About SF450 million of this will be booked in the second half, with the majority recognized in the third quarter.
The savings will come from redundancies as well as natural attrition and further real-estate rationalization, UBS said.
Investment banks worldwide have been hit by slow trading because of the debt problems in the eurozone and US, as well as regulations aimed at forcing banks to hold more capital to protect them from future shocks after the 2008 global financial crisis.
UBS joins a growing line of banks, including HSBC, Barclays and Goldman Sachs, in slashing thousands of jobs.