Bloomberg reports that UBS will cut as many as 10,000 jobs companywide as the trading business shrinks, a person with knowledge of the plan said.
Many of the reductions will come in the trading businesses overseen by investment-bank co-head Carsten Kengeter and probably will occur over several quarters, said the person, who requested anonymity because the plans haven’t been made public. An announcement may come when UBS reports third-quarter earnings on October 30th, the person said.
Although some job losses will come from front office over at the investment bank - as UBS continues to scale back risk - the Swiss bank is also said to have embarked on a major European-wide restructuring project that aims to save costs by sharing logistics and IT support across investment banking, global asset management and private banking. Core services are likely to be provided in centres of excellence (payments / reconciliations / settlements, etc), with specialist services being outsourced. This initiative is designed to create economies of scale, reduce headcount and capture signficant cost savings.
The Financial Times quotes an unnamed source, who said: 'There were several options on the table, but UBS has decided on the most radical one'.
And The Wall Street Journal is reporting that UBS could eliminate between 5 and 15 business lines over at the investment bank, with a third or more of the unit's 16,432 positions being lost. The newspaper says that the groupwide restructure is likely to take between 3 and 5 years.
One banker told Here Is The City: 'Everyone talks about UBS scaling back the investment bank, but as bad as these cuts will be, the restructuring is likely to go much further. CEO Sergio Ermotti will take his axe Groupwide. Nothing will be sacred - even Group functions in Switzerland will be impacted'.
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