The traders are being sent home on full pay as the consultation process for their departure begins, the person said, who asked not to be identified as the details are private. The employees were informed of the move as they entered their offices this morning, the person said. An official from UBS in London declined to comment.
UBS, based in Zurich, boosted its profitability goal today and announced plans for about 10,000 job cuts as Chief Executive Officer Sergio Ermotti scales back the investment bank to focus on wealth management. Ermotti, on a conference call, described job losses as “painful consequences” of the reorganization.
“As we work through this process, we will ensure that every affected employee will be supported and treated with care,” said Ermotti, 52.
UBS is in the midst of retreating from capital-intensive investment-banking businesses such as fixed-income trading to rely more on its wealth management unit, the world’s second largest, to boost returns for shareholders.
The investment bank will keep its advisory business, as well as equities, foreign exchange and precious metals, and will maintain some capabilities in rates and credit. About 2,000, or 28 percent, of about 7,200 front-office staffers will be cut at the division globally, and total reductions at the unit will be “north of 5,000,” Ermotti said.
Delivering on targets will be the best way to keep morale up for the remaining staff, he said.
“There are two dimensions: there is a dimension of the people that are affected and a dimension of the ones that survive,” Ermotti said. “What we’re doing now is basically creating clarity about our strategy: what we are, and what we’re not. The best retention plan is to have a business that is successful and sustainable.”