The loss of jobs in the financial sectors in New York, London, Switzerland, Tokyo...3rd inning at best. UBS to Cut 7,500 Jobs After First-Quarter Loss, Asset Outflows Share | Email | Print | A A A By Elena Logutenkova April 15 (Bloomberg) -- UBS AG, Switzerlandâs biggest bank, said it will cut an additional 7,500 jobs after reporting a loss and outflows of client funds in the first quarter. The bank will reduce the number of employees globally to 67,500 in 2010 from the previous target of 75,000, Zurich-based UBS said in a statement today. UBS had a loss of almost 2 billion Swiss francs ($1.75 billion) in the first quarter. Chief Executive Officer Oswald Gruebel, who was called out of retirement in February, told employees last month that theyâll have to face cost cuts as he tries to make the bank financially independent from the government amid an âicy headwindâ from market turmoil. UBS, which has racked up more credit-related writedowns than any other European bank, has raised more than $32 billion from investors including the Swiss government. It has also cut 11,000 jobs in the past 18 months. âItâs back to basics,â said Andy Lynch, who helps manage about $5 billion at Schroder Investment Management Ltd. in London. âUBS, in common with every other financial institution, is looking to cut costsâ and will probably cut back in trading while focusing on its âprivate banking heritage.â UBS has fallen 11 percent this year in Swiss trading, cutting the companyâs market value to 38.9 billion Swiss francs. That compares with a 2.1 percent gain in the 65-member Bloomberg Europe Banks and Financial Services Index. Financial institutions worldwide announced almost 300,000 job cuts since the beginning of the credit crisis as writedowns and losses swelled to $1.3 trillion. âExtremely Cautiousâ Goldman Sachs Group Inc. Chief Financial Officer David Viniar said yesterday the U.S. bank remains âcautious about the near-term outlookâ after reporting a first-quarter profit that exceeded the most optimistic Wall Street estimates, helped by trading in fixed-income, currencies and commodities. UBS last month posted a 20.9 billion-Swiss-franc loss for 2008, the biggest-ever by a Swiss company, and said it remains âextremely cautiousâ about the outlook for this year. The bank amassed more than $50 billion in writedowns and losses since the beginning of the financial crisis. At the end of March it employed 76,200 people. Gruebel hired Ulrich Koerner earlier this month as chief operating officer to cut administrative expenses, tapping a former colleague who helped him turn around Credit Suisse Group AG six years ago. UBS said yesterday it will eliminate about 240 jobs from its wealth management unit in the Asia-Pacific region, about 3 percent of the staff in the area, as the credit crisis erodes the spending power of its clients. Shareholders at UBSâs annual investor meeting in Zurich will today vote on a proposal to appoint former Finance Minister Kaspar Villiger as chairman of UBSâs board of directors. He will replace Peter Kurer, who quit after a year in the job amid a probe into whether UBS helped wealthy Americans evade taxes. The bank will also ask shareholders for permission to increase share capital by as much as 10 percent if necessary. Michel Demare, Ann Godbehere and Axel Lehmann will also be nominated as directors. Demare has been chief financial officer of ABB Ltd., the worldâs largest builder of power grids, since 2005. The U.K. government installed Godbehere as CFO of Northern Rock Plc after nationalizing the lender in February last year. She is a former CFO of Swiss Reinsurance Co. Lehmann is chief risk officer of Zurich Financial Services AG. To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net Last Updated: April 15, 2009 01:26 EDT
Correction: Make that 8,700 jobs. UBS Cuts 8, 700 More Jobs By REUTERS Published: April 15, 2009 Filed at 2:12 a.m. ET http://www.nytimes.com/reuters/2009/04/15/business/business-us-ubs.html ZURICH (Reuters) - UBS <UBSN.VX> <UBS.N> will post a first-quarter loss and cut 8,700 more jobs as it struggles to recover, its new chief executive said on Wednesday, warning that Switzerland's largest bank faces an uncertain future. Chief Executive Oswald Gruebel, the veteran former Credit Suisse boss who has been pulled out of retirement to get UBS back into shape, said the bank will post a first-quarter loss of nearly 2 billion Swiss francs ($1.74 billion), mainly due to writedowns and outflows at its prized wealth management unit. UBS shares were indicated down 2 percent. He was due to tell the bank's annual general meeting that he aimed to cut staff to 67,500 in 2010 from 76,200 at the end of March in a bid to save up to 4 billion francs. "Unfortunately I am not able -- as yet -- to offer you any good news. Instead I am forced to present you with another round of unsatisfactory performance figures and to announce further drastic measures," Gruebel said in the text of his speech. "Our outlook remains cautious and we face many uncertainties. We have to prepare ourselves for this even though we are entitled to be very optimistic about the longer-term prospects for our bank." Traders welcomed the job cuts but said the loss was bigger than expected. "The result is a huge disappointment. After the unexpectedly good figures from Goldman Sachs and Wells Fargo and optimistic comments from Deutsche Bank about the first months, we were expecting at least a flat result from UBS," one said. The financial crisis has already forced the bank to announce about $50 billion of writedowns and 11,000 job cuts since mid-2007 and its shares have lost nearly three- quarters of their value in the last twelve months as it struggles to recover. About 2,500 jobs would be axed at the bank's home Swiss division, which employed above 26,000 people at the end of 2008. Gruebel gave no details about headcount reductions in other regions. NEW LOSS UBS posted in 2008 a 20.9 billion franc full-year loss, the biggest ever for a Swiss company. The first-quarter loss follows about 3.9 billion francs of losses on illiquid assets and 23 billion francs of outflows at the bank's wealth management and Swiss bank division, Gruebel also said. UBS has been the target of a U.S. tax fraud investigation alleging it had helped rich U.S. clients to hide untaxed money in secret Swiss accounts and Gruebel said the outflows accelerated after the bank agreed in February to pay a $780 million fine. But the onshore wealth management business in America performed well, with net new money amounting to 16 billion francs in the first quarter. Gruebel said investment banking, which is to blame for most of the bank's losses so far, would continue to be a necessary business for UBS but said he was carrying out a review of all business areas to decide which to exit. He said the investment bank would build on its strong positions in equities, foreign exchange, corporate finance and M&A, but would exit other areas and geographies. The CEO also said UBS would make big cuts in marketing, sponsorship and external consultants and support and would also make significant savings by cancelling certain employee benefits, mostly at the management level. The icon of Swiss banking, came on the verge of collapse in the autumn and was forced to go to the Swiss state in October for help. Berne gave it a cash injection of 6 billion Swiss francs ($5.21 billion) and the Swiss National Bank agreed to absorb into a special fund some of UBS' toxic assets now amounting to $40 billion. (Editing by Erica Billingham) ($1=1.152 Swiss Franc)
Maybe those jobs weren't really lost at all, maybe they just went under the table and don't pay anymore taxes.