UBS is planning to some drastic cutbacks in its struggling investment bank and central functions as well as several hundred jobs in information technology, while focusing on its more profitable wealth management business, according to reports.
A Swiss newspaper report on Sunday said that the bank will slash 2,000-4,000 jobs in investment banking and central functions as well as 900 jobs in information technology, the Chicago Tribune reported.
Tighter capital rules making banks much less profitable than they used to be as well as a dwindling number of deals are forcing many investment banks into drastic cost-cutting measures. UBS has been further hit by the 2008 financial crisis and last year’s $2.3 billion rogue trading scandal.
[For more coverage of UBS' layoffs, read UBS Set to Cut 400 Investment Banking Jobs.]
UBS’s restructuring marks the next step in the bank’s strategy unveiled almost a year ago of allowing its investment bank to have a support role to its lucrative wealth management business.
Last year, UBS vowed to cut more than 5 percent of its workforce, equaling some 3,500 jobs across the whole bank. It slashed 2,000 jobs last year and pledged to cut the unit’s staff levels to 16,000 within five years.
The Financial Times notes that at the end of June, its investment bank employed only 16,432.