Ubs Expected To Axe Thousands Of Jobs

The Age

Tuesday May 6, 2008

Vanessa Burrow

SWISS investment bank UBS is expected to announce thousands of job cuts when it releases its first-quarter results today.

The bank last month approved a capital raising of 15 billion Swiss francs ($A15.1 billion), to help counteract about $US38 billion ($A40.4 billion) in losses on the US subprime mortgage market and other investments.

UBS has already accepted billions in capital injections from the Government of Singapore Investment Corporation and an anonymous Middle Eastern investor.

But analysts also anticipate thousands of job cuts, which will probably be made in the investment banking business, including the loss-making fixed-income division.

Some Australian jobs could be lost, although most cuts would be in Europe and the US.

During March, former UBS Australasia chief executive Brad Orgill told BusinessDay he did not anticipate wholesale job cuts in Australia.

"Fortunately we haven't (had to lay off staff) in Australia for a very long time and I'd be hopeful that we wouldn't get to that point," he said.

"There's a healthy natural turnover of between 5% and 10%, or 5% and 12% in our industry. So when you get periods like this, as you see those people drifting off, you're probably much less quick to hire replacements."

However, Mr Orgill, who stepped down last week in favour of co-head of investment banking Matthew Grounds, said challenging times also offered opportunities for hiring. "You get businesses that might become available for sale, you get individuals or teams of high-quality people that perhaps might look to shift and so we'll selectively hire and take advantage of those sort of opportunities," he said.

UBS will announce its results about 5pm Australian time.

? For reports on the UBS results, go to theage.com.au/businessday

© 2008 The Age

Back to News Index | Back to Home