Published November 07, 2012
LONDON – UBS AG has brought back several employees who were put on leave when it unveiled a drastic pullback from fixed income last week, and more could follow, sources familiar with the situation said.
The Swiss bank stopped dozens of traders from reaching their desks in London last Tuesday, when it unveiled an exit from most of its rates and bond trading businesses in a strategic overhaul that will lead to 10,000 global layoffs.
The bankers were placed on special leave until further notice, while in the United States UBS fired several fixed-income employees by phone.
UBS has already brought back a small handful of employees who were on leave, two people familiar with the matter said.
It could also ask more to return or rehire some where needed, said three other sources, including UBS insiders, adding that some desks were now too thinly staffed to operate properly, if they were desks the bank ultimately wanted to keep going.
UBS declined to comment.
Rehiring staff after big layoffs is not unheard of, headhunters said, and UBS had given itself the option of bringing back staff through its special leave arrangement in the UK.
It took that step to ease the way for a formal consultation required under British law, to go over which positions will ultimately be cut.
But its methods have sparked confusion and some anger among some UBS staff still at the bank, even if many are supportive of the Swiss bank's overall strategy.
"It's a good idea," one insider said of UBS's retreat from fixed income to refocus on equities trading and corporate finance advisory, seen as its bigger strengths.
"But the way of doing it has not been good. Turning people away ... looked bad, and now it looks like there were some mistakes in terms of the people who left."
Three sources said there was an emerging market sales and trading desk which only had one senior employee still in place, and that this was one area where staff could be brought back.
UBS's new investment bank boss Andrea Orcel told staff in meetings in the last week that the job-cut process was complex, and that some elements could have been done differently or could need adjusting, two of the sources said.
But he denied, when asked, that the plan had been in any way rushed, adding it had been many months in the planning, a third person said.
"We recognize refinements in execution are almost always inevitable, particularly when you embark on a rapid transformation such as this. However, our course of direction is clear," Orcel said in a memo to staff this week, referring more broadly to the bank's strategy rather than specific staffing changes on the trading desks.
UBS's exit from fixed income, where it had lagged rivals and used up a lot of capital, won support from some analysts now urging peers to consider similar radical moves.
(Additional reporting by Anjuli Davies and Aimee Donnellan at IFR; Editing by Alex Smith and David Holmes)