Preparing for tough times ahead UBS has said its cutting 3,500 jobs. Switzerland’s biggest bank wants to reduce annual spending by 1.75 billion euros.
UBS said almost half the cuts would be in its investment banking division which has been underperforming.
The bank had already said it would cut jobs when it posted weak second quarter profits last month.
Like rival Credit Suisse, UBS has been grappling with rising regulatory costs and a high value Swiss franc, which are eating into profits.
“The cost cutting is an admission of defeat. UBS overhired after its near-collapse in early 2009, but was unable to win back market share,” said Kepler Capital Markets analyst Dirk Becker.
“With more difficult markets, the economics of its investment bank became so uncompelling that the group now has to retreat,” Becker said.
Banks are slimming down as weak investment trading this year looks set to continue due to the debt problems in the euro zone and United States. Many banks are carrying high costs after hiring aggressively in 2009 and early 2010 when trading income surged following the financial crisis.
UBS, which had to be rescued by the Swiss government in 2008 after massive losses on toxic assets, slashed staff to around 64,000 from 78,000 before the financial crisis, but it grew again in the last year to over 65,700.