UBS CEO Calls Job Cuts 'Painful' as 10,000 Laid Off
UBS announced plans to cut around 10,000 jobs and close its fixed income business after a trading scandal and a quarterly net loss of 2.2 billion Swiss francs ($2.4 billion) Tuesday morning.
The job cuts, which had already been rumored, are part of one of the biggest investment banking shake-ups since the credit crisis began. They represent around 15 percent of the group's current headcount of 64,000.
Sergio Ermotti, brought in as chief executive of the Swiss bank just over a year ago, told CNBC Tuesday that the cuts were "the most painful part of what we are going through."
The bank's New York, London and Zurich offices will be worst affected by the cuts, as the investment banking operations are concentrated there.
Ermotti told CNBC: "We want to do more than just a pure cost-cutting exercise. We want to be more effective and efficient in everything we do."
He added that the cuts were motivated by increased "visibility about the regulatory framework" for European banks and the deterioration of the macroeconomic situation.
UBS is planning to save around 3.4 billion Swiss francs annually by 2015 through shutting down the fixed income business.
The bank took impairment charges of 3.1 billion Swiss francs in the third quarter. Adjusted pre-tax profit for the quarter was 1.4 billion Swiss francs.
One of its former traders, Kweku Adoboli, is currently on trial in London over trading alleged to have caused the bank $2.3 billion of losses.