Is UBS disproportionately divesting itself of senior staff and making way for ambitious juniors?
Back when the fraud at UBS was first unearthed, a former UBS employee ventured an opinion to the Financial Times on what might have gone wrong.
"About two and a half years ago they got rid of a lot of senior people and promoted young people with not very much experience from analyst support roles in order to save money," he said (possibly bitterly as he may have been one of those senior people himself).
Could it be that UBS is doing something similar again?
According to headhunters, the bank has just let go of numerous executive director and MD level staff as part of the CHF2bn per year cost cutting plan it confirmed on August 23rd.
Allegedly, the cuts were disproportionately aimed at senior level staff, who were removed from various desks, including rates, CVA and structuring. These dismissals were apparently a prelude to a more widespread reorganization of the business after the bank's investor day in mid-November.
Extracting senior staff has the advantage of swiftly removing cost and clearing the way for ambitious juniors. It has the disadvantage of clearing out senior people with great and superior wisdom.
This is clearly undesirable. However, if senior staff are being disproportionately targeted at UBS it may merely be a prelude to chopping junior and mid ranking staff later. When UBS announced its cost cutting plan in August, it said cuts would affect all businesses and all levels.
