Australia and Asia likely to escape worst of UBS job cuts

UBS is planning global redundancies, but at this stage it seems that Australia and the wider Asia Pacific region won't be so badly affected as the US and Europe.

The cuts come hot on the heels of a 49 per cent plunge in Q2 net profits. Earnings at its investment bank dropped by 71 per cent due to slow trading in fixed income, currencies and commodities.

The firm says in its investor release that "significant restructuring" will happen later this year, but it hasn't specified how many jobs will go. Swiss newspaper Tages-Anzeiger reckons the number will be about 5,000.

An Asia Pacific spokesperson for the bank hasn't yet answered our request about the extent of potential layoffs in Asia Pacific. However, recruiters with knowledge of the firm don't expect any drastic reductions.

"Like most of the foreign banks in Australia, I think UBS will be insulated from the immediate cuts overseas particularly as it has a strong advisory business. Back office and IT might be a different matter in the coming months, but the same will apply to other bulge brackets as well," says one Sydney headhunter, who asked not to be named.

James Rushworth, managing director, South Asia, Profile Search & Selection, says jobs cuts are unlikely to affect Asia Pacific too much because the region is still seen as an engine of growth, especially compared with poorly performing markets elsewhere.

"All banks go through a cycle of reflection in the middle of the year where they take stock of how they are doing, it's not just UBS. While some of these banks are clearly going through difficult times and headcount will be affected, this will mainly be in Europe and the US," says Rushworth.

Besides, 5,000 layoffs would represent less than 8 per cent of UBS's workforce (estimated to be more than 65,000) - below the attrition rate that a firm typically experiences, he adds.

Client advisors in wealth management won't be affected by job cuts, according to UBS chief financial officer Tom Naratil.

UBS continues to invest in wealth management in Asia. Aamir Kiyani, division head, banking and finance, Monroe Consulting Group, says the Swiss bank is currently looking to hire several executive directors in private banking in Asia, all of them with at least US$300m to 400m AUM. "I haven't heard anything about job cuts, but it definitely doesn't look like front office will be affected," he says.