After experiencing $17.3 billion in losses in the first quarter from its investment-banking unit, UBS announced on May 6 that it plans to cut 5,500 jobs, approximately half of which will come from its securities division. According to a report on Bloomberg.com, UBS said that its clients withdrew 12.2 billion dollars in assets more than they deposited in UBS’s wealth management and asset management divisions during the most recent quarter. The most recent UBS job cuts are on top of approximately 48,000 other layoffs announced by the world’s biggest banks and securities firms in the past year, mostly resulting from write downs and losses from the US subprime crisis.
In connection with the layoffs, UBS announced that it will slim down the securities unit and focus on the wealth management or private banking franchise that is the core of UBS’s business.
UBS had already eliminated 1,500 jobs in its investment banking unit at the end of 2007. In connection with the latest round of job cuts, the bank also announced that it was planning to exit the municipal bond business and would sell approximately $15 billion in distressed assets to a newly-created fund managed by BlackRock, Inc.