UBS to Cut 3,500 Jobs; Which Banks Could Be Next?

by Douglas McIntyre Aug 23rd 2011 7:30AM
ubsIn a cost-cutting move, Swiss banking giant UBS (UBS) announced Tuesday that it would trim 3,500 people from its workforce over the next two-and-a-half years. Most of the cuts, which are expected to save $2.5 billion in annual costs, will be in the firm's underperforming investment banking unit. The New York Times reported that the bank will take a charge of $698 million and most of that will be this year.

The announcement is just the latest in a string of other layoffs made by large banks. Credit Suisse announced job cuts in June. Bank of America (BAC) recently said it would cut 3,500 people. Its stock has suddenly dropped to a 52-week low of $6.31 compared to a 52-week high of $15.31 on concerns that its mortgage portfolio is deeply troubled. HSBC could cut as many as 30,000 people.

A logical question is which financial firms will add to the long lists of layoffs? If the stock market is any indication, Citigroup (C) is in nearly as much trouble as Bank of America. Its business units mirror those of BAC. It is one of the large financial shopping centers with trading floors, credit card businesses, consumer banks, and investment bank operations. It is also under pressure because of mortgage backed securities it sold to some clients. And let's not forget its lackluster earnings in the last quarter and the the fact that Citigroup's shares are off 45% in the last six months.

The other logical candidates are Morgan Stanley (MS) and Goldman Sachs (GS) The publicity around Goldman would cause some people to think it is the more troubled of the two. But, Morgan Stanley's shares are down over 45% in the last six months compared to a Goldman's 35% drop over the same period. Each firm announced that it has lost money on a number of trading days last quarter. Morgan reported losses on 11 days. Goldman lost money on 10. It was not many quarters ago that trading day losses were rare.

The wave of layoffs coming to the financial services industry has been predicted many times in the recent past. What has become more clear recently is that not all banks are created equal. That will force some to restructure -- and soon.

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103 Comments

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racings12a

Not sure how Bank of America can be in trouble, they are only paying me 5/10% on my savings account.

August 24 2011 at 8:50 PM Report abuse rate up rate down Reply
alfrankenfarce

More Progressive Liberal's out of a job. hehehehe

August 24 2011 at 1:40 PM Report abuse rate up rate down Reply
gramps180

Banks are becoming a thing of the past most people are heading toward credit unions.Bank just try and gouge their customers.

August 24 2011 at 10:02 AM Report abuse +1 rate up rate down Reply
1 reply to gramps180's comment
tmachine2

Amen...We should support credit unions and local community banks.

August 24 2011 at 10:56 AM Report abuse +1 rate up rate down Reply
jkennedy806

Yesterday I read a very good article on Huffington Post by Tymaine ??? about black banks. Before the crisis by these too big to fail gangsters there were 54 black owned banks. at present there are maybe 24 managed by black enterprising people who want to assist their communities because the to big to fail bankster goons wouldn't look at them or in the case of wells Fargo were ripping them off with sub prime ghetto loans. The banksters got mad when these little black owned banks started making money and started to shut them down, and NOT ONE RECEIVED BAIL OUT MONEY --- except Maxine Water's husband. Now people it's time, all money is green, take your mola out of Wells Fargo, Citi, Skank of America and support a local community bank. IS THERE ANY BLACK OWNED BANKS IN THE LEHIGH VALLEY pa????

August 24 2011 at 8:16 AM Report abuse +2 rate up rate down Reply
jcp

Can you all say OBAMACARE??? Layoffs at banks include secretaries, computer programmers, REGULAR FOLKS.

August 24 2011 at 7:56 AM Report abuse -2 rate up rate down Reply
David

Sorry for the typos on that last post folks. Homeowners have been sitting back and watching while banks are forcing their property values down artificially. They should never have atrificially inflated some homes to begin with. I have never been able to receive say, $300,000.00 in financing on a $100,000.00 anywhere at any time. If I could, I would have taken the money and run with it (just joking of course). Everone should not have to suffer at the hands of a few people, like Bernie Madoff. Anyone ever notice the perfect last name there...Madeoff. He literally made-off with billions. Why? How? Greed. That's how. People don't want to work for their money. They want their money to work for them. Day traders are the worst thing that could ever happen to us. They all want to sit at home all day long and make millions while never shaking a stick at anything. I worked hard for my money and I have no regrets. It felt great to get an honest days pay for an honest days work. But few others share in this mentality. They are afraid to sweat. These are the big CEO's of virtually everyone Corporation in America. I paid my taxes to help fund the day to day operations of this once great nation. Now they take their business and monies overseas to avoid paying Corporate taxes. Middle class working America has had the tax monkey on their back for the past 40-50 years. Doesn't seem as though it's going to crawl off any time soon either. We truly need an Indepenent Party that will listen and do the true will of the people. The Dems want to give it all away and let people sit and home and draw welfare. The Repubs want to give it all to their rich,wealthy counterparts and partners in crime. So who do you vote for? Your interests are not going to be represented in any form or fashion. Sad days in America. You can't realitistcally expect SS and Disabilty recipients to pay for all the other programs to sustain this country. And we need to help the American people first before we offer any aid to other countries.

August 24 2011 at 7:37 AM Report abuse +2 rate up rate down Reply
David

What?? Banks are under-performing?? First they took Many billions from our Govt. to bail them out because of their greedy and shady mortgage deals. Then came credit card reform that made them put all the small fine print into larger print. That cause everyone's interest rates oc cc's to go anywhere from 2-4% to approx. 11.99-19.99%. Really??
And they tightened up on their lending requirements. One must have a minimum credit score of 720 before any bank will even consider them for anything. Interest is what keeps their motors running. GMAC would have been bankrupt many years prior had it not been for their mortgage operations, which made them money. But where is GMAC now? BOA is an absolute joke and they are squeezing every dollar they can from every customer. I haven't talked to anyone that is happy with either their bank nor mortgage holder since everything went to Hades three years ago. Homeowners are the ones who suffered and still are.

August 24 2011 at 7:21 AM Report abuse +2 rate up rate down Reply
1 reply to David's comment
tmachine2

Let's add Charter One Bank (RBS Citizens) to that list.

August 24 2011 at 10:58 AM Report abuse +1 rate up rate down Reply
Bill

when will the senior people start to feel pain? i have yet to see one of them take a pay cut, lose a bonus etc.
It is so easy to cut jobs.

August 24 2011 at 5:44 AM Report abuse +3 rate up rate down Reply
EldonFlorence

boo hoo.............so sorry for the banks,,,,,,,,,,,,,,oh boo hooo

August 24 2011 at 12:12 AM Report abuse +3 rate up rate down Reply
eldize

ALL THE CRROKS SHOULD GO OUT OF BUSINESS we shouild of never bailed any of them out ALL THEY DO IS STEAL FROM PEOPLE

August 23 2011 at 11:36 PM Report abuse +3 rate up rate down Reply