UBS handed out pink slips to about 700 staffers in North America last week as part of a broader plan by the Swiss banking giant to slash 2,000 jobs globally.
Executives who spoke to The Post described the layoffs as deep and far-reaching, and they come as UBS is set to report third-quarter results today.
The company is projected to report a modest $260 million profit for the quarter, but its longer-term health remains in question. UBS has been buckling under about $47 billion in losses on soured debt, legal investigations and massive outflows in its bread-and-butter money-management franchise.
To be sure, the economic slowdown is whacking financial institutions of all stripes but UBS has had the misfortune of being involved in nearly every toxic area of this recent financial crisis.
The bank has been forced to write down mortgage securities, and has had problems in so-called auction-rate securities. In addition, UBS is the target of an Internal Revenue Service probe into whether the bank helped rich clients avoid paying taxes.
Its banking missteps have been a reputation nightmare for the once-vaunted Swiss-banking franchise, and has turned UBS into Switzerland’s problem child. Last month, the Swiss government stepped in to provide nearly $60 billion in funds to help the bank shed toxic assets and reserve against further damage.
However, the government bailout has done little to stem an exodus of wealth-management clients, whose outflows for the third-quarter totaled $71 billion.
That brings UBS’ losses in assets under management to a whopping $110 billion over the past two quarters, and doesn’t include what likely has been another drop in assets under management following a disastrous October for Wall Street.
Meanwhile, former UBS equities research executive Mitchel Guttenberg was sentenced yesterday to 78 months in prison for what was described as the biggest insider-trading scam on Wall Street since the 1980s.
Sean O’Shay, Guttenberg’s lawyer, had requested a lighter sentence from US District Judge Deborah A. Batts, calling his client a “broken man,” but he was denied.
Guttenberg was arrested last year in a $14-million plot to give insider information to hedge-fund clients on UBS stock upgrades and downgrades, including Goldman Sachs and Caterpillar.