UBS to axe 2,000 jobs

Swiss bank UBS said today it was axing 2,000 jobs and closing down its commodities dealing operation as part of a major investment banking reorganisation.

The group, which employs around 7,000 of its existing 19,000 investment bank staff in London, declined to say how many cuts would hit the UK.

It takes the number of job losses at UBS's investment banking arm to 6,000 during the past year. The Swiss giant has been one of the worst hit by investments in "toxic" mortgage-backed assets, suffering investment write-offs of more than $42bn (£23.7bn) since the start of last year.

UBS said it would be reducing its fixed income and currency dealing operations, as well as "substantially" downsizing its real estate securitisation business as part of the changes.

Jerker Johansson, chairman and chief executive of UBS investment bank, said: "The ongoing crisis in the financial markets and dramatically changed industry dynamics require us to recalibrate our business."

The bank's job cuts are the latest to hit the City, and follow several hundred redundancies from collapsed US investment bank Lehman Brothers this week.

UBS said job losses would be across the board at its investment bank, but targeted to businesses "being exited or downsized in order to protect and sustain our core client franchises".

A spokesman for the bank said: "We will communicate as quickly as possible to the people being affected. The plan is that everybody will know sooner rather than later."

Mr Johansson added: "While the revenue outlook is uncertain, these measures will allow us to focus on our strengths, reduce the cost base to a more sustainable level and position our core businesses for growth once fundamentals improve."

The job losses were announced after the group's shareholder meeting in Switzerland yesterday.

UBS chairman Peter Zurer indicated the bank may be over the worst of its troubles, telling investors he expected the group to be profitable in the third quarter this year. That would be the first surplus since the second quarter of last year.

Next year is also set to be profitable, Mr Zurer said.

According to the Financial Times, he told investors: "Despite difficult market conditions, we have made substantial progress over recent months and have laid a foundation on which we can build."

UBS shares rose 8 per cent yesterday.