In what insiders say is another round of redundancies supplementary to the 2,600 investment banking jobs cuts it announced in May, UBS is about to announce another 1,900 layoffs, according to Bloomberg.
The cuts are apparently set to come in “investment banking, equities and fixed income”, and follow 1,695 redundancies in the UBS investment banking business between March and June 2008.
With structured finance teams decimated and UBS’s strong equities business already culled selectively, investment banking staff are thought to be particularly at risk. “After the initial round, a lot of people at UBS felt there was still a lot of duplication in investment banking teams and that the cuts hadn’t been particularly savage,” says one headhunter.
Assuming a buyer can be found, analysts speculate the latest round of cuts could be a prelude to splitting off the investment bank: “In its present size, UBS would be too large for the Swiss authorities to rescue,” says one buyside analyst. “Swiss regulators should be pushing for a very rapid split of the corporate bank and the investment bank.”
Bankers point that the Swiss bank is not alone in making cuts: “This is a story across the City – not just UBS. Only 10% of people are being cut. But for the people let go, it’s a disaster. They are going to find it very hard to get a new job.”