Finance minister welcomes UBS job cuts
Finance Minister Eveline Widmer-Schlumpf has made her first comments on Tuesday’s announcement by Swiss bank UBS that it would cut 10,000 jobs, 2,500 of which are in Switzerland.
“I welcome [the decision] very much,” said Widmer-Schlumpf, who also holds the rotating Swiss presidency this year.
Scarred by scandals and losses, UBS unveiled a plan to overhaul its global operations that will see it cut thousands of jobs as it drops risky trading activities and drastically downsizes its investment banking unit.
Switzerland’s biggest bank has for years been trying to reshape its business and clean up its image as it tries to recover from a damaging US tax evasion dispute, a scandal over unauthorised trades and a slew of bad investments. The company was bailed out by the Swiss government in 2008.
“We’ve held a huge debate about ‘too-big-to-fail’ in Switzerland, and part of the discussion was always about investment banking,” Widmer-Schlumpf said in Bern on Wednesday.
The job situation at the big banks has to be compared with the time before they began building up their investment banking activity, she said. A reduction in the number of positions could not be avoided.
She stressed that downsizing was always tragic for the people involved, but in this case it was necessary. Changes in the UBS structure would help it avoid another intervention by the government and would improve the bank’s reputation, she said.
Economics Minister Johann Schneider-Ammann agreed.
“I regret the job cuts. It is never good news for the economy if restructuring is necessary,” he told Swiss radio on Tuesday.
“The financial sector has been under pressure and the companies have no choice but to look ahead. It is positive that they are looking for a way out, but the consequences are less good news.”
In 2008 UBS made an annual loss of SFr21 billion, the biggest in its history. In the same year the Swiss National Bank was forced to bail out the company with a SFr6 billion loan and by taking over bad debt.
UBS was the first Swiss bank to be investigated by US prosecutors for helping US citizens avoid paying tax: in 2009 it was forced to pay a $780 million fine.
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