We’re half way through job cuts: UBS CEO

UBS is about half way through its planned 10,000 job cuts, said Sergio Ermotti, chief executive officer of Switzerland's biggest bank, which is undergoing a major cost-cutting overhaul.

"We are almost half way through. The structural changes in the investment bank are done. The second chunk is about becoming more efficient and effective across the board in wealth management, investment bank, asset management, in the way we operate and support our businesses," Ermotti told CNBC Asia's "Squawk Box" on Friday.

(Read more: UBS to cut up to 10,000 jobs)

The bank has suffered its share of losses and setbacks since the onset of the global financial crisis and is in the process of reshaping itself, by shifting its focus away from risky trading in its investment banking division toward its wealth management operations.

Massive downsizing plans announced by UBS last October were not received well by its employees, with disgruntled staff taking to social media to voice their frustration about how bank is handling the layoffs.

(Read more: Shocked UBS staff take to Twitter)

According to media reports, which cited sources within the bank, some staff turned up to work to find their employee cards no longer worked at the turnstile only to be escorted to human resources.

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Sergio Ermotti, chief executive officer of UBS

"It was ugly and not easy for myself," Ermotti said. "Unfortunately I have to think about the rest of the 55,000 [employees]," when making this kind of decision.

Describing how the Swiss government's decision earlier this year to ease the country's once untouchable bank secrecy laws is impacting UBS' business, Ermotti highlighted the global nature of the bank's business. "In Switzerland, we have a large asset base, but the largest pool of assets is in the U.S., almost $800 billion, around $200 billion in Asia, $300 billion in Europe – we are much more about a global business than a Swiss business."

He noted that 80 percent of client assets are denominated in foreign currency, and no longer in Swiss francs.

(Read more: Wealth management revival as UBS tops poll)

In late-May, the Swiss government said it would allow banks to sidestep secrecy laws to reveal the names of clients – a move intended to help resolve a long-standing dispute with the U.S. over tax evasion.

Since UBS said in 2009 that it had helped clients avoid paying taxes, there has been pressure internationally to clamp down on secrecy in the banking sector.

Regarding the regulation of Europe's overall banking sector, Ermotti said he doesn't believe a banking union is the solution to the currency bloc's woes.

(Read more: UBS CEO to CNBC: Our radical overhaul is working)

"The banking union cannot be the solution of Europe's problems. You need structural reforms in the economy [and the] social system. Europe as an economy needs to be much more competitive," he said.

"A banking union will allow the banking system to be safer and contribute to the transformation, but you can't really ask a financial institution or the system to be the driver of change in the economy," he added.

A banking union seeks to place euro zone banks collectively under the supervision of the European Central Bank, with a common resolution framework for dealing with troubled banks and a common deposit scheme .

—By CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H