Swiss banking giant UBS slashes 10,000 jobs

UBS revealed plans on Tuesday to wind down its fixed income business and fire 10,000 bankers, in one of the biggest bonfires of finance jobs since the implosion of Lehman Brothers in 2008.

The move will focus Zurich-based UBS around its private bank and a smaller investment bank, ditching much of the trading business that saw it lose US$50 billion in the financial crisis and one suspected rogue trader lose US$2.3 billion last year.

Chief Executive Sergio Ermotti, in charge for only 13 months, is spearheading the three-year investment banking overhaul that is aimed at saving 3.4 billion Swiss francs (US$3.63 billion) and returning cash to shareholders.

The Swiss bank will separate many fixed-income activities in order to wind down positions in businesses it will exit due to far tougher capital rules on riskier business.

Current investment bank co-head Carsten Kengeter will leave UBS’s top management board to head the discontinued unit.

The remaining investment bank, comprised of equities, foreign exchange trading, corporate advice, and precious metals trading, will be run by Andrea Orcel, a recent Ermotti hire from Bank of America who currently co-runs the unit with Kengeter.