It is one of the toughest periods in the recent past for the business owners to post a healthy, positive balance sheet. While Europe is reeling under regression, America is fighting against the ‘Sandy’.
In a recent report revealed by the Swiss Bank UBS, it was unveiled that the bank intended to lay off 10,000 workers as it was closing down its fixed income business and return to its core banking business. The tough decision as per the senior officials of the bank was taken after it found it difficult to return profits from trading on adapting to tough capital rules.
From now on the Zurich based UBS would focus on a smaller investment bank and wealth management, closing down its trading business which posted a loss of $50 billion because of the financial crisis.
The news of the layoff, as expected was not taken of sportingly by the UBS staffers. Some of them vented out their frustration through social media websites after scores of traders were not allowed to enter the London offices of the bank this week. Others who had been laid off unknowingly showed up at work only to find that their employee cards were not accepted at the turnstile. They were then lead to the human resources department where they were given their personal items and a letter which said that they were being sent on a two weeks paid leave and that they could return after the said time to collect their redundancy package.
In the year 1998, UBS had seen a similar outrage by staffers after it laid off thousands of employees when the two big Swiss banks had merged to form the current UBS. The then staffers had coined the acronym, “U’ve Been Sacked” for UBS and several of the laid off employees revived the acronym, tweeting it across the internet on the curt treatment meted out by the Swiss bank.
The bank’s decision to lay off 10,000 workers would save 3.4 billion Swiss Francs. Sergio Ermotti, the Chief Executive of the bank said that the decision to lay off workers was hard but imperative to create a UBS that would survive in the future. He also said that the business model thus created after the lay off was unique for the banking industry.
The shares of the UBS had already soared 7.3 percent at the start of the week anticipating the announcement. Indeed when the announcement was made, they were up by another 4.3 percent due to heavy trading and went on to touch 13.69 Francs. Citing the rise of share prices as an example, Dirk Becker, the analyst for Kepler Capital Markets said that the change for UBS was transformational and that investors had wanted this to happen since long. He also said that the downsizing infused investor interest and made UBS an attractive investment option.