UBS shares have jumped over 5% today after a leaked report that the bank is soon to cut up to 10,000 jobs and wind down its fixed-income operations.
These radical changes represent a significant strategy change that could enable UBS to substantially increase capital return to shareholders, although simultaneously adding to the large number of job losses the financial sector has already seen this year.
The changes won’t come all at once, however – The Financial Times has cited insiders as saying the contraction of the investment bank will take three years, creating job losses in London, Zurich and the USA.
The changes are expected to be announced tomorrow, along with UBS’ third-quarter earnings , but news of the plans started leaking last Friday. Citi analysts have commented: ‘If UBS does take radical action, we would expect this to kick off further industry restructuring.’