Amid the tempestuous scenario in global financial markets, Swiss banking giant UBS on Friday announced repositioning of its investment bank and will slash up to 2,000 jobs.
The ongoing crisis in the financial markets and dramatically changed industry dynamics require us to recalibrate our business, UBS Investment Bank chairman and CEO Jerker Johansson said in a statement.
While the revenue outlook is uncertain, these measures will allow us to focus on our strengths, reduce the cost base to a more sustainable level and position our core businesses for growth, once fundamentals improve, he said.
The investment bank would prioritise its business portfolio to preserve its core strengths and client franchises across equities and fixed income, currencies and commodities (FICC), while downsizing or exiting certain business activities, a UBS statement said.
This would lead to greater efficiencies and a further reduction in the banks headcount and balance sheet, it added.
Meanwhile, the investment bank would reduce net headcount by an additional 2,000 bringing staffing levels to about 17,000 by year-end. The present reduction takes the total job cuts to around 6,000 since the peak in third quarter 2007.
"Reductions would be predominantly targeted to businesses being exited or downsized in order to protect and sustain our core client franchises," it added.
As part of repositioning, UBS Investment Bank would continue to build on its equities business by leveraging its strengths in cash distribution, derivatives and prime services, while seeking further efficiency gains. It would maintain its leading position in investment banking to provide clients with strategic advice and access to the capital markets.
Further, it would reposition its fixed income, currencies and commodities (FICC) business around client servicing and facilitation.
The investment bank would exit commodities (excluding precious metals), substantially downsize real estate & securitisation and proprietary trading and preserve its core foreign exchange, rates and credit businesses, the company said.
A right-sized investment bank, positioned alongside the worlds premier wealth management and leading institutional asset management business, will enable UBS to position itself as one of the core groups of universal banks that are likely to dominate in this redrawn landscape, Johansson added.