UBS said it planned to cut staff by 3,500, or more than 5 percent of its global workforce, as part of its overall plan to trim about $2.5 billion from its yearly expenses by the end of 2013 “to improve operating efficiency,” the company explained in late August. About 10 percent of the job eliminations, or 350 positions, will take place within the wealth-management operations in the Americas and will affect corporate staff, not advisors, UBS says.
“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 rationalization,” according to a UBS press release.
UBS says that it will trim some $570 million in costs from its operations worldwide in the second half of 2011 with roughly $507 million related to personnel expenses and the remainder in real estate. The majority of the cuts affect investment banking, though about $170 million will be trimmed for the global wealth-management and Swiss banking operations and close to $30 million from Wealth Management Americas.
When it released its second-quarter earnings results in late July, UBS said it planned to “eliminate costs of 1.5 billion to 2 billion Swiss francs [$1.9 billion to $2.5 billion], while remaining committed to investing in growth areas” over the next two years. According to data compiled by Bloomberg, more than 100,000 jobs are set to be lost this year in the global banking sector.
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UBS’ wealth-management operations in the United States and Latin America include some 6,860 financial advisors as of June 1, up from 6,760 advisors a year ago. The unit is led by Bob McCann, formerly of Merrill Lynch.
The staff headcount at the Americas unit — excluding financial advisors — totals 16,240 vs. 16,341 in June 2010. Thus, after eliminating 350, the total number of staff would be 15,890.
Costs for staff at the New York-based unit were nearly $1.2 billion in the second quarter, which advisors accounting from about $600 million of these expenses. Compensation commitments and advances for recruited advisors in the period were $410 million.