5,500 jobs to go at UBS
by Kay Murchie
Swiss banking giant UBS has announced it is to axe 5,500 jobs as a result of the global credit squeeze.
It is understood that 2,600 of the job cuts would be in its investment banking unit, which has a workforce of 19,000 people but which has been hit by a 40% contraction in global deal volume during the first quarter.
The job cuts represent approximately 7% of its workforce.
The bank also revealed losses for the first 3 months of 2008 of 11.5 billion Swiss francs ($11 billion, £5.5 billion), compared with a net profit of just over 3 billion Swiss francs (£1.44 billion) in the first quarter of 2007.
A spokesperson for the bank said conditions in financial markets remain difficult. The bank also revealed that it is to sell $20 billion worth of sub-prime debt to the fund manager Blackrock.
The sale is seen as an encouraging sign that the troubled market for US sub-prime debt is starting to improve, say analysts.
Marcel Rohner, UBS’ chief executive, said we can see tangible effects as a result of our initial responses to the losses. We see clearly that there are sophisticated investors coming into this market, and this itself we view as strong support.
However, the bank warned that conditions were likely to remain challenging.
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