2016 has been characterized by a wave of job cuts at several leading lenders in Europe, with the epicenter of the trend being London. A combination of factors such as rising labor costs and lagging profits has propagated an influx of pink slips, with UBS joining the ranks in November, according to a recent Reuters report.
The scope and scale of the cuts has varied across the industry. Lenders such as Deutsche Bank, Standard Chartered and Barclays have all spearheaded this strategy, in many instances cutting or relocating personnel out of London. While these cuts have largely been relegated to back office or IT jobs, several other units such as foreign exchange (FX) and fixed income desks have also been put on the chopping block or consolidated.
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For its part, UBS will cut several dozen jobs across its private banking segment, which follows a previously announced restructuring of its flagship wealth management unit. Back in September however, UBS also relocated a total of 56 back-office jobs from its Luxembourg branch to its office in Wroclaw, Poland, as part of the bank’s cost-cutting strategy as it seeks to restore profitability.
Adding a layer of complexity to this recent trend however, UBS Group AG’s CEO Sergio Ermotti appeared to exercise caution against a wave of outflowing personnel in a recent Bloomberg Television interview: “It would be a very risky decision to take such steps. It may well be that we are not going to move anybody, or it may be that we move people. But in absence of certainty, we won’t take any decision.”
Despite the reticence, UBS is dealing with a large increase in regulatory burdens, as well as negative interest rates and restrained client activity. Its latest cuts will be affecting employees worldwide at IPS, which provides products and services to wealth management clients – the cuts are estimated to be fewer than 100 personnel.
Overall however, months of lean spending and restructuring has taken a toll – UBS’s wealth management division as of September 2016 had 9,918 full-time employees, down from 10,135 in Q2 2016.