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Depressed of UBS

With UBS likely to announce sweeping job cuts over the next few weeks, staff at the bank are said to be feeling understandably anxious.

“People at UBS are very nervous,” says one structured credit headhunter. “The feeling is that at worst they will get axed, and that at best they’ll be paid atrociously this year.”

Structured credit and fixed income teams at UBS are likely to bear the brunt of any cuts after the Swiss bank announced a further $19bn of writedowns on its US subprime mortgage-related holdings earlier this week, taking the total so far to $37bn.

And according to Seeking Alpha, there may be even more cuts to come.

“The job cuts we’ve seen at UBS already have just been the start of the process,” says Simon Adamson, an analyst at research firm CreditSights. “Most of what they’ve been doing so far has been dealing with the losses and the writedowns, but they are now looking at a broader strategic review.”

That strategic review is likely to see the bank pulling back on proprietary trading and structured credit, in favour of client-orientated businesses.”They are stressing that they want to be a client-focused firm rather than one that takes proprietary risks,” says Adamson.

Structured credit – not much to cut

According to one headhunter, UBS’s London-based structured credit business remains largely untouched. “The cash CDO and CDO of ABS teams have gone from around 10 to around eight people in Europe, while in the US they’ve gone from about 25 to five,” he says.

Even if the team is cut to the bone, UBS is unlikely to achieve spectacular cost savings. “They only have around 18-20 people in total in consumer asset securitization, residential mortgage finance and principal finance in London – it’s not the size of Merrill at its peak, or Deutsche,” adds the headhunter.

For this reason, the head of one search firm in London says cuts will need to be broader:
“Everywhere will be hit. There will be another 5-10% of cuts across the board.”

Structured credit professionals who lose their jobs won’t be without options. Ted Tracey, of search firm Clifden Partners, says some banks want to capitalise on the talent available in the market and build out their structured credit platforms. Banks rumoured to be hiring include NAB and Standard Chartered.

Comments (13)

Comments
  1. I think it is good that key Board members are being held accountable at UBS. But how about the people who advise the Board? Seems like they should also take responsibility

  2. Couldn’t happen to a nicer bank

  3. All these structured credit employees should feel nervous about losing their jobs because this whole mess is the direct result of all their structuring, underwriting, and selling of crap that no one on the sell-side (and buy-side as well for that matter) seem to fully comprehend… so let’s call it payback time!

  4. Well, I could say similiar things about Wealth Management/Private Banking employees.

    Why not educating the population so that everybody is able to create and manage his own more cost efficient and probably better performing portfolio.
    Then we could get rid off all those brown-nosed commission based Private Wealth Managers….
    Think about that!

  5. Hold on Gene i would chose my words very carefully. What do you mean ‘brown nosed’?

  6. Trade mon enfant and let the big boys invest!

  7. NAB? You serious? Being a former NAB employee, know quite well that some senior Lon people were heading for the door. Aus MBS market is not immune to the crunch, and anyway, NAB would hire like, 3 people at most!

  8. Traders arbing the cheap capital from the rest of bank for far too long. Its a shame that such few poor traders (who think they are very special) ruin a great bank

    former employee Reply
     
  9. Given UBS’ current focus on improving its risk management procedures, the bank would do well to well to assess the potential risk from the high number of expected employee redundancies. As a bank which brands itself as a great place to work, it is crucial this image is not impacted further from weaknesses in the current Employee Handbook. Any redundancy or termination on other grounds must be seen to conform to the local employment laws and HR best practice

  10. Well said Mary. All I can add is: “In your (and my) dreams…” Managers protecting their own positions and hogging the lion’s share of what’s left of this year’s bonus will throw good people to the wolves and trash their professional reputations en route by way of justification. It will, most definitely, not be the first time.

  11. Well said Jane. Many managers are not very graceful about handing out redundancies to good people.

  12. ‘Not very graceful…’ That has to be one of the understatements of the millennium! Stir up any organisation in troubled times, and eventually the scum will rise to the top. Unfortunate truism, but rather timely.

  13. Never have truer words been said.

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