Does UBS Now Stand for "U've Been Shed"

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It appears that Switzerland's largest bank, UBS, is about to get a little smaller according to Swiss weekly Der Sonntag.  Quoting the Swiss publication which came out over the weekend, Reuters reports that UBS could soon announce steps to reduce headcount by as many as 5,000 employees, or nearly eight percent of its global headcount.

According to Reuters, Sonntag also reports Credit Suisse will cut between 1,000 and 2,000 employees as a way to trim costs.

At the close of the second quarter, UBS had about 63,520 employees and Credit Suisse had about 48,200 workers, based on filings with the SEC.

Neither UBS nor Credit Suisse would comment on the article about the anticipated job cut. Both firms are preparing to release third quarter earnings. Credit Suisse reports its Q3 earnings this Thursday and UBS follows on October 30.

Last week we reported UBS planned to reduce its massive IT force by eliminating 1,000 of its estimated 8,200 tech jobs worldwide.

There are currently 677 openings for experienced financial professionals at UBS, according to the careers page of the bank's website. It may be worth noting that just 18 of those openings are in its investment bank, while its Wealth Management unit has 119 openings.

"What we're seeing," said Jeanne Branthover, Head of the Global Financial Services Practice at Boyden Global Executive Search, based in New York, "is that they're continuing to hire for all levels in Private Banking and Wealth Management, from those serving upper middle class to high net worth and ultra high net worth clients.

"Where we're not seeing much hiring," she added, "and where we're seeing the most layoffs are in areas that are not expected to grow in 2013, such as investment banking, M&A and some areas of trading."

When asked why, she replied that "while M&A is showing some improvement, it hasn't come back to the degree they expected it to, and while some areas of trading were hot last year, they're no longer as hot as they were."

The recruiter also noted there has been a drop off in demand for infra-structure positions in areas such as accounting and compliance, both of which had been fertile hiring grounds over the past year.

As for the possibility of UBS cutting 5,000 jobs and shifting its focus to wealth management, Richard Lipstein, a Managing Director with Gilbert Tweed International, said, "it's not much of a surprise. Didn't they just move one of their senior investment bankers, Guy Phillips, over to wealth management. I believe I read that was going to be their strategy anyway."

Lipstein's assessment is reflected in an article today on the Wall Street Journal's Deal Journal blog, which said Phillip's shift "parallels changes at the firm as a whole. After suffering bruising losses in its investment-banking arm in recent years, UBS is slimming down that division and focusing it more on serving wealth-management clients. It also comes amid a sluggish market for deals."

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