UBS Set To Cut 5,000 Jobs To Save $1.2B, Credit Suisse Axing 1,000
ZURICH - UBS is set to cut around 5,000 jobs to save 1 billion Swiss francs ($1.20 billion) while rival Credit Suisse is planning to axe about 1,000 staff, Swiss newspapers reported on Thursday.
Citing an unnamed UBS insider, the Tages-Anzeiger daily said the precise details of the cost-cutting program still had to be agreed and approved by the board, but should be announced in conjunction with the bank's second-quarter results on July 26.
The newspaper had already reported on Tuesday that thousands of jobs were threatened at UBS and rival Credit Suisse, without giving precise figures.
UBS declined to comment but wealth management head Juerg Zeltner was quoted last week as saying the bank needs to rein in costs given tough market conditions while chairman Kaspar Villiger also said cost cuts were inevitable.
Meanwhile, Credit Suisse is set to cut about 1,000 jobs to save 800 million francs, the Handelszeitung newspaper reported on Thursday, also citing an unnamed insider. The paper said the bank would announce its plans along with its results on July 28.
A Credit Suisse spokesman declined to comment beyond reiterating the bank's standard position that it is always reviewing resource deployment and adjusting its business to market conditions and the needs of its clients.
The Handelszeitung quoted an insider as saying UBS was planning to save about 90 million francs annually by closing 27 offices in Zurich and concentrating staff in five big centers.
Switzerland's biggest bank, which had to be rescued by the state in 2008 after massive losses on toxic assets, slashed staff to around 64,000 from around 78,000 before the financial crisis, but it expanded again in the last year to over 65,000.
Personnel costs have risen sharply as UBS has increased fixed salaries to attract and retain staff given its relatively low bonuses, capped after public outrage during the crisis. It has also hired aggressively in the growth markets of Asia.
A tough second quarter for investment banking earnings, dragged down by sovereign debt woes in Europe and trading jitters, is prompting many banks to cut jobs.
Like other global banks, UBS and Credit Suisse are suffering from sluggish markets, but they face the added burden of high cost bases in Switzerland as the safe-haven Swiss franc soars to new record highs against the dollar and the euro.
The strong franc, boosted by concerns over high government debts in the euro zone and the United States, has prompted many Swiss companies to warn their margins are suffering.
UBS has already said it will cut about 500 technical staff, or nearly 6 percent of its IT workforce.
Analysts said UBS is likely to cut staff at its Investment Products and Services unit, set up in 2010 to provide products to the bank's wealthy clients, where there have been concerns about efficiency after more than 2,000 staff were hired.
UBS shares were down 1.6 percent while Credit Suisse dipped 1 percent, in line with a 1.2 percent weaker European banking sector index.
($1=.8326 Swiss Franc)
(Reporting by Emma Thomasson, Catherine Bosley and Silke Koltrowitz. Editing by Jane Merriman and Hans-Juergen Peters)
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