UBS AG may cut as many as 8,000 jobs as it grapples with the biggest credit writedowns of any European bank and a 12 billion Swiss franc ($11.4 billion) first-quarter loss, Bloomberg reports.
Switzerland’s biggest bank, which had a 3 billion Swiss franc profit a year earlier, is set to spell out plans for layoffs when it reports detailed results tomorrow. The company will probably say it’s eliminating 2,500 to 3,000 jobs in its investment bank alone, more than 10% of the division.
“UBS is scaling down investment banking, including reducing trading bets and giving up off-balance sheet units,” says Dirk Becker, an analyst with Landsbanki Kepler. “It was realistic to estimate that UBS would sack 10% of its 83,000 employees.”
Writedowns at the Zurich-based bank after the U.S. subprime mortgage meltdown have swelled to $38 billion over the past three quarters, a result of building a debt securities business at the peak of the market. Chairman Marcel Ospel, who replaced half of the executive board since losses began in 2007, stepped down last month. UBS already cut 1,500 jobs late last year.
UBS rose 8 centimes, or 0.2%, to 36.88 Swiss francs in Swiss trading. It has lost 50% in the past 12 months, making it the sixth-worst performer in the Bloomberg Europe Banks and Financial Services Index of 59 stocks.
The Swiss bank got shareholder approval last month to raise 15 billion Swiss francs in a rights offer after receiving 13 billion Swiss francs from investors in Singapore and the Middle East in March.