UBS to Lay Off Up to 10% of Advisory Arm

UBS is cutting back its investment banking division (IBD) representing between 5 and 10 percent of the jobs within the Swiss bank's advisory arm, several UBS bankers said.

The IBD comprises mergers and acquisitions (M&A) advisory by client, country and sector. The cuts will affect existing staff and open positions that will not be filled.

UBS declined to comment on the job cuts.

The move is part of the 3,500 job cuts announced in August and is not directly related to a $2.3 billion loss resulting from an unauthorised trade.

About 20 to 30 managing directors will be let go in Europe, a source with knowledge of the matter said. The job reduction exercise is already completed in the United States, this source said.

The cuts are expected to affect every team at every level with a focus on niche and non-core areas of coverage, one of the bankers said.

People are gradually discovering whether they are staying or leaving as the job reductions were not announced in one go, the bankers said.

UBS first announced staff reductions of about 3,500 in July to save a total of approximately 2 billion Swiss francs ($ 2.2 billion) from annual costs by the end of 2013.

About 45 percent of the cuts will come from the Investment Bank, 35 percent from Wealth Management & Swiss Bank, 10 percent from Global Asset Management, and 10 percent from Wealth Management Americas, UBS said at the time.

"Redundancies are decided on the basis of individual performance and the relative importance of the area of coverage," the same banker added.

The cuts will also include managing directors and other people on high-pay, a second banker said. UBS is aiming at skimming its IBD to focus on dealmakers, but the Swiss bank may be challenged to keep its star bankers as the rogue trading loss means another year of disappointing bonuses, and a further loss of motivation.

The bankers said that bonuses paid over the past three years have been significantly inferior to those in other banks.

"Clients are being kind to us, but the problem will be retaining good people. The investment banking world is reshaping more quickly than people think," said a third senior UBS banker.

"I don't know any M&A banker who is happy with his situation at the moment. The macro-economic environment is not the best to find a job ... but I think most people will leave the bank as soon as they have an opportunity," said another London-based banker who quit UBS recently.