UBS to axe 3,500 employees

Swiss banking major UBS today said it would slash 3,500 jobs as part of cost-cutting measures, with nearly half of the cuts planned in the investment banking division.

"UBS today provides an update on its plans to eliminate expenses of a total of approximately 2 billion Swiss francs ($2.5 billion) from annual costs by the end of 2013, consistent with our announcement on July 26, 2011," the bank said in a statement.

"These plans include savings associated with headcount reductions of approximately 3,500, which will be achieved through redundancies as well as natural attrition and further real estate rationalisation," it added.

The move comes close on the heels of rival Credit Suisse Group announcing about 2,000 job cuts last month as part of efforts to save 1 billion Swiss francs in costs after it witnessed a 52% plunge in second quarter profits.

Of the expected 3,500 staff member reduction, about 45% will come from the investment banking division, 35% from UBS' wealth management and Swiss bank division, 10% from its global asset management division and 10% from its Wealth Management Americas division, the bank said.

UBS expects to incur a restructuring charge of around 550 million Swiss francs on the cost-cutting plan and around 450 million Swiss francs of this will be booked in the second half of 2011, with the majority recognised in the third quarter (July-September).

Investment banks across the world have been hard hit by slow trading because of the debt crisis in the eurozone and US, coupled with stringent regulations aimed at forcing banks to hold more capital to protect them from bankruptcy after the 2008 global financial crisis.