UBS plans to cut London jobs if markets fail to bounce back

UBS, the global banking giant, is planning to cut investment banking jobs in London for the first time in three years unless the global economy rebounds, it said yesterday.

Marcel Ospel, its chairman, told a Swiss newspaper that the bank had excess capacity in its operations and singled out the UK and New York for possible redundancies.

But he said the future of investment bank staffing depended on how quickly markets rebound from the worst slump in decades. "If the environment improves in the next six months, then the addition and reduction of jobs over the business units and regions will balance out," he told SonntagsZeitung. If no upswing emerges in 2003, "then we will probably reduce our headcount slightly", he added, without being more specific.

Mr Ospel said UBS investment banking operations had overcapacity given the current depressed state of financial markets. "But we still expect that the geopolitical uncertainty will ebb from the financial markets and that business will pick up," he said.

He said existing plans to cut some 800 jobs in Switzerland represented only a slight reduction of the 28,000 staff who work for UBS in its home country and 70,000 around the world.

He dismissed speculation that UBS could acquire the Credit Suisse First Boston investment banking unit of Swiss rival Credit Suisse Group. "We have an investment bank, are focused on organic growth and thus have no such aspirations [to buy CSFB]," he said.

While financial firms across the world have axed some 100,000 jobs in the past two years, UBS has resisted trimming the headcount of its investment-banking business. Last month it reported its first quarterly loss in four years thanks to debt defaults and plunging demand for advice on mergers and share sales. At its investment bank UBS Warburg profits fell by 36 per cent.

A spokeswoman for UBS in London said: "We have always said that we do not envisage any major headcount reductions in our investment banking operations." She said the headcount in London had been broadly stable for the past three years.

Meanwhile, Mr Ospel said UBS was closely following lawsuits against banks accused of disseminating misleading stock research, but he insisted UBS had done nothing wrong.