Swiss banking giant UBS plans to cut as many as 10,000 employees or some 16% of its overall staff, to cut costs at its struggling investment bank. The news came at the same time Switzerland’s largest bank announced another large loss for its third quarter operations.
Approximately 7,500 of the cuts are likely to take place in London and the United States, where UBS has a large trading operations center located in Stamford, Conn. The other 2,500 cuts are slated to be in Switzerland.
Wall Street approved of the move and sent the stock was trading 5% higher Tuesday in Zurich on top of the 7.3% rise Monday amid speculation over the cuts.
UBS has struggled since late 2008, suffering significant losses tied to the actions of a rogue trader as well as from investor suits for losses associated with Lehman Brother’s backed proprietary structured notes. At one point it was believed UBS might pull out of the U.S. market altogether but the bank apparently decided to weather the storm and remain in the once profitable U.S. market.