The good news: UBS has figured out a way to save $2.5 billion annually moving forward. The less than good news:
UBS AG said Tuesday it will lay off more than 5% of its overall workforce, mainly at its investment bank, part of an plan to save 2 billion Swiss francs ($2.5 billion) annually as the bank faces weaker earnings, tougher regulation and a surging Swiss franc. The Zurich-based banking giant will charge up to 450 million francs in restructuring costs for the move in the third quarter, with the remainder to follow in the last three months of this year. The revamp follows a collapse in second-quarter net profit by almost half following a poor showing from UBS's fixed-income arm, which is being forced to reverse expansion plans. "UBS will continue to be vigilant in managing its cost base while remaining committed to investing in growth areas," the bank said in a statement Tuesday.
Though scant on details, UBS said its investment-bank business will bear the brunt of the job cuts, accounting for 45% of the overall 3,500 positions to be lost, while the wealth-management and Swiss bank unit will account for 35%, it said.