Britain Tries To Clean Out The Rats And Banksters

UBS banking job cuts set to hit London hard

In one of the biggest banking job culls since Lehman Brothers, London and New York to be hit hard by 10,000 layoffs worldwide

the Guardian,

30 October, 2012

Swiss banking giant UBS is cutting up to 10,000 jobs worldwide as it scales back its investment banking operations.

In one of the biggest banking job culls since Lehman Brothers, the axe will fall heavily in London and New York, where UBS's investment banking operations are based. In London, about two-thirds of its 6,500 staff work in investment banking. The rest work in wealth and asset management, which are not affected by the latest cuts.

The Zurich-based bank plans to reduce its global headcount from 64,000 to 54,000 in the next three years and said some 2,500 jobs will go in Switzerland. It declined to give further detail. It is winding downits fixed-income activities if they are no longer profitable as a result of new capital rules on riskier busineses introduced since the financial crisis. Some 2,000 front-office staff will lose their jobs, with knock-on effects on supporting roles.

A spokesman denied reports on Twitter that some staff cannot get into the London offices beside Liverpool Street station because their passes have stopped working. He said: "When people arrive they go up in a room and get told by someone from HR."

According to Bloomberg News, around 100 traders in fixed income in London are being put on special leave. They are being sent home on full pay as the consultation process for their departure begins.

The restructuring is expected to deliver savings of £3.5bn by 2015.

Chief executive Sergio Ermotti said: "This decision has been a difficult one, particularly in a business such as ours that is all about its people. Some reductions will result from natural attrition and we will take whatever measures we can to mitigate the overall effect. Throughout the process we will ensure that our people will be supported and treated with care."

The news came as UBS posted a loss of £1.4bn for three months to September, compared with a profit of £670m a year ago. The bank took a one-off charge of £2bn linked to the restructuring of its investment banking division and a debt-related charge of £574m.

It wants to focus on its private bank and leave other business lines, mainly in fixed income. The Swiss bank said these divisions had been "rendered uneconomical by changes in regulation and market developments".

The remaining investment bank operations - equities, foreign exchange trading, corporate advice, and precious metals trading - will be run by Andrea Orcel, a recent Ermotti hire from Bank of America.

"The net impact of all these changes will be transformational for the firm," chairman Axel Weber and Ermotti told shareholders in a letter. "Our overall earnings should be less volatile, more consistent and of higher quality."

Profits slid 40% to £1.5bn in the first six months of the year. UBS said in July that the botched stock market listing of Facebook cost it £227m. It blamed the loss on Nasdaq's "gross mishandling" of the flotation, which involved a series of technical errors that caused a delay in the start of trading of Facebook shares in May.

Former UBS investment banker Kweku Adoboli, who is accused of almost sinking the bank with illicit dealing, denied on Monday that he had been a rogue trader when he lost the bank £1.4bn. He said other members of his team knew about his "off book" activities. The 32-year-old is currently on trial at Southwark crown court in London, accused of gambling away the money while working for UBS during the global financial crisis.