UBS Setting Sights on Second Phase of Job Cuts
In October 2012, UBS announced the bold decision to wind down its fixed income business and return the Swiss bank to its key focus: private wealth. Less than 12 months into its multi-year plan, UBS is progressing nicely. The Swiss bank has completed roughly half of the 10,000 planned job cuts.
Speaking on CNBC last week, UBS Chief Executive Officer Sergio Ermotti acknowledged that the bank has wrapped up nearly all the structural changes needed to reform its investment bank (read: fixed income layoffs). Now for the hard part. Up next are efficiency changes to the bank’s hallmark businesses – wealth management, asset management and less risky investment banking units, said Ermotti. Back office cuts are also likely to be made.
For UBS, the restructuring has been rather successful. The hope now is that the next round of layoffs goes a bit smoother than the first effort. In late 2012, UBS FICC bankers in London who were on the cut list were greeted in a rather impersonal fashion: their key cards didn’t work. Those who did get through security were shepherded into a room and handed all their personal items in plastic bag. Senior staffers who made it to their desks found letters saying their services were no longer needed.
"It was ugly and not easy for myself," Ermotti told CNBC. "Unfortunately I have to think about the rest of the 55,000 [employees].”
Janet Yellen’s fortunes have fluctuated. In July she was the favorite to become Fed chairman. In August she wasn’t. Now that Larry Summers has dropped out of the running, she’s the favorite again. So what makes Yellen likely to succeed and what makes her likely to crash and burn?
Goldman Sachs analysts interviewed a bunch of future rich people – Goldman interns – to get a better idea of their behaviors. The next generation of bankers doesn’t buy groceries online, rarely ever cooks their own meals and fewer vote than you’d probably imagine. Nearly half didn’t cast a ballot in 2012.
Steven Scopellite, Goldman Sachs’ global head of the technology division and chief information officer, will retire at the end of the year. He will be replaced by Marty Chavez, current co-head of equities in Goldman’s securities division. The announcement comes just weeks after Goldman experienced an embarrassing trading glitch.
The gap between the valuations of financial stocks and the S&P 500 is as wide as in early 2008. Investors are still terrified of banks, despite all the recent sunny press.
A data glitch halted options trading on Monday at Nasdaq, the CBOE, Bats and NYSE Euronext. It’s a nightmare scenario for market operators, who just last week made promises to regulators that they would improve their systems.
Goldman Sachs is better prepared for an economic crisis than it was earlier this year, at least according to Goldman Sachs. The bank would log a $6.2 billion loss in a hypothetical financial collapse, down from the $6.6 billion projection announced earlier this year.
Buzz Around the Office
T. Boone Pickens didn’t take too kindly to a reporter jabbing him for falling off Forbes’ list of American billionaires. “Don't worry. At $950 million, I'm doing fine,” Pickens tweeted to ESPN’s Darren Rovell. “Funny, my $1 billion charitable giving exceeds my net worth.” Faced.
List of the Day: Quitting Smart
Before sprinting in to your boss’s office to quit, make sure you have crossed these three things off your list.
- Get your new job offer in writing.
- Complete pre-employment requirements like background checks and drug testing.
- Create mechanisms to keep in touch.