GENEVA -- Swiss banking giant UBS AG announced massive layoffs
Tuesday along with huge losses in its third-quarter results, saying it
aims to trim as many as 10,000 employees to drastically shrink its
ailing investment bank.
Switzerland's biggest bank said that as
part of the cost-cutting drive it "is likely to have a headcount of
around 54,000" by 2015, down from its current 64,000 employees among 57
countries.
The bank posted a net profit loss of 2.17 billion Swiss
francs ($2.31 billion), compared with a profit of 1.02 billion Swiss
francs ($1.13 billion) during the same three-month period through
September 2011.
In what it called "a significant acceleration" in
its transformation, the Zurich-based bank said it would sharpen its
focus on the investment bank and appoint a new executive to lead it.
UBS
CEO Sergio Ermotti said the investment unit, which has been hit by a
series of costly blunders in recent years, will "continue to be a
significant global player in its core businesses."
The bank
attributed some of the declining profit to a pretax charge of 863
million francs ($920 million) linked to an accounting rule on how banks
must value their debt. Banks can post gains if the value of their debt
falls, because it would theoretically become cheaper for the bank to
repurchase that debt.
But the rule also says that when a bank's
debt increases, it must take a write-down because it would theoretically
have to pay more to buy back its own debt on the open market.
Ahead of the cuts, the value of UBS's stock rose 7.3 percent to close at 13.12 Swiss francs Monday on the Zurich exchange.
Associated Press