UBS lost CHF 2 billion
Switzerland’s biggest bank plans to cut 8,700 jobs amid first quarter losses.ZURICH - Switzerland's biggest bank UBS on Wednesday said it would cut 8,700 jobs in order to "make substantial cost savings" amid losses for the first three months of this year.
The bank, which was struggling to recover after losing billions in the financial and economic crisis, said its losses for the first quarter reached about CHF 2 billion (EUR 1.32 billion, USD 1.75 billion).
As a result it is seeking to "realize substantial cost savings in all areas."
"Major job cuts are unfortunately unavoidable. UBS expects to reduce the number of its employees to about 67,500 in 2010," said the bank, which employed 76,200 people at the end of March.
The latest job cuts are in addition to the 11,000 which were announced since October 2007, and would save the bank up to CHF 4 billion.
Even as the bank downsizes, the bank's new chief executive Oswald Gruebel warned that the bank may still be troubled.
"But you should not assume that this will bring about a marked improvement in our results as early as the next few quarters. Our outlook remains cautious and we face many uncertainties," he said in a speech to be delivered to shareholders during the bank's annual general meeting later Wednesday.
The bank said it did not stop an outflow of funds, as its net money outflow for the Wealth Management and Swiss Bank division reached some CHF 23 billion.
"The outflow was mainly recorded after the announcement of the agreement in connection with the investigation into our cross-border activities for US clients," said Gruebel.
One of UBS’s biggest challenges is in the United States, where the bank faces a US government lawsuit to recover the details of some 52,000 US customers suspected of tax offences.
The bank paid USD 780 million to US justice authorities in February to settle other charges of assisting tax fraud.
Gruebel acknowledged recent attempts by countries including the US, Germany and France to stop tax cheats, and said UBS was "under particularly close scrutiny in this regard."
"The operating conditions for cross-border wealth management will change, and this will affect how our clients act. We shall make sure that this does not catch us unprepared," he said.
AFP / Expatica