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UBS may slash 8,000 jobs amid write-downs

The Swiss giant's investment bank is hit hard by credit debacle.

May 05, 2008|From Bloomberg News

UBS may cut as many as 8,000 jobs as it grapples with the biggest credit write-downs of any European bank and an $11.4-billion first-quarter loss.

Switzerland's biggest bank, which had a $2.85-billion profit a year earlier, is set to spell out plans for layoffs when it reports detailed results Tuesday. The company will probably say it will eliminate between 2,500 and 3,000 jobs in its investment bank, more than 10% of the division, two people familiar with the matter said.

"UBS is scaling down investment banking," including reducing trading bets and giving up off-balance-sheet units, said Frankfurt, Germany-based Landsbanki Kepler analyst Dirk Becker, who advises clients to reduce holdings of UBS. It is realistic to estimate that the company will fire 10% of its 83,000 employees overall, he said.

Write-downs at the Zurich-based bank after the U.S. sub-prime mortgage meltdown have swelled to $38 billion over the last three quarters, a result of the bank's building a debt securities business at the peak of the market.

Chairman Marcel Ospel, who replaced half of the executive board since losses began in 2007, stepped down last month. UBS already cut 1,500 jobs late last year.

UBS lost 51% in Zurich trading in 12 months through Friday, making it the fifth-worst performer in the Bloomberg Europe banks and financial services index of 59 stocks.

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