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UBS slashes 10,000 jobs

  • FILE- City trader Kweku Adoboli, arrives at Court in London in this file photo dated Thursday Sept. 22, 2011,  where he is accused of fraud and false accounting at Swiss banking giant UBS. Adoboli broke down in tears as he took the stand for the first time Friday Oct. 26, 2012, as he insisted he had acted purely to help save the bank he considered his family. Adoboli has pleaded not guilty to all charges against him. (AP Photo/Sang Tan, File)

    FILE- City trader Kweku Adoboli, arrives at Court in London in this file photo dated Thursday Sept. 22, 2011, where he is accused of fraud and false accounting at Swiss banking giant UBS. Adoboli broke down in tears as he took the stand for the first time Friday Oct. 26, 2012, as he insisted he had acted purely to help save the bank he considered his family. Adoboli has pleaded not guilty to all charges against him. (AP Photo/Sang Tan, File)

  • US Secretary of State Hillary Rodham Clinton, centre and High Representative for EU Foreign Policy Catherine Ashton, centre left, speak with EU High Representative Valentin Inzko , second right, alongside US Ambassador to Bosnia and Herzegovina Patrick Moon, right. In the background are EU Special Representative Peter Sorensen, second left and EU Force Commander Major General Robert Brieger, left, prior to meetings at the US Embassy in Sarajevo, Bosnia, Tuesday, Oct. 30, 2012. The top American and European diplomats are on a joint diplomatic tour of the Balkans, urging rival ethnic groups and governments in Bosnia, Serbia and Kosovo to settle their differences for the good of their nations. U.S. Secretary of State Hillary Rodham Clinton was talking Tuesday with European Union foreign policy chief Catherine Ashton in the Bosnian capital of Sarajevo. They are then meeting together with Bosnia's three presidents before travelling to Belgrade for similar talks with Serbian leaders. Clinton and Ashton will see Kosovo's leaders on Wednesday. (AP Photo/Saul Loeb, Pool)

    US Secretary of State Hillary Rodham Clinton, centre and High Representative for EU Foreign Policy Catherine Ashton, centre left, speak with EU High Representative Valentin Inzko , second right, alongside US Ambassador to Bosnia and Herzegovina Patrick Moon, right. In the background are EU Special Representative Peter Sorensen, second left and EU Force Commander Major General Robert Brieger, left, prior to meetings at the US Embassy in Sarajevo, Bosnia, Tuesday, Oct. 30, 2012. The top American and European diplomats are on a joint diplomatic tour of the Balkans, urging rival ethnic groups and governments in Bosnia, Serbia and Kosovo to settle their differences for the good of their nations. U.S. Secretary of State Hillary Rodham Clinton was talking Tuesday with European Union foreign policy chief Catherine Ashton in the Bosnian capital of Sarajevo. They are then meeting together with Bosnia's three presidents before travelling to Belgrade for similar talks with Serbian leaders. Clinton and Ashton will see Kosovo's leaders on Wednesday. (AP Photo/Saul Loeb, Pool)

  • US Secretary of State Hillary Rodham Clinton, centre and High Representative for EU Foreign Policy Catherine Ashton, centre left, speak with EU High Representative Valentin Inzko , second right, alongside US Ambassador to Bosnia and Herzegovina Patrick Moon, right. In the background are EU Special Representative Peter Sorensen, second left and EU Force Commander Major General Robert Brieger, left, prior to meetings at the US Embassy in Sarajevo, Bosnia, Tuesday, Oct. 30, 2012. The top American and European diplomats are on a joint diplomatic tour of the Balkans, urging rival ethnic groups and governments in Bosnia, Serbia and Kosovo to settle their differences for the good of their nations. U.S. Secretary of State Hillary Rodham Clinton was talking Tuesday with European Union foreign policy chief Catherine Ashton in the Bosnian capital of Sarajevo. They are then meeting together with Bosnia's three presidents before travelling to Belgrade for similar talks with Serbian leaders. Clinton and Ashton will see Kosovo's leaders on Wednesday. (AP Photo/Saul Loeb, Pool)

    US Secretary of State Hillary Rodham Clinton, centre and High Representative for EU Foreign Policy Catherine Ashton, centre left, speak with EU High Representative Valentin Inzko , second right, alongside US Ambassador to Bosnia and Herzegovina Patrick Moon, right. In the background are EU Special Representative Peter Sorensen, second left and EU Force Commander Major General Robert Brieger, left, prior to meetings at the US Embassy in Sarajevo, Bosnia, Tuesday, Oct. 30, 2012. The top American and European diplomats are on a joint diplomatic tour of the Balkans, urging rival ethnic groups and governments in Bosnia, Serbia and Kosovo to settle their differences for the good of their nations. U.S. Secretary of State Hillary Rodham Clinton was talking Tuesday with European Union foreign policy chief Catherine Ashton in the Bosnian capital of Sarajevo. They are then meeting together with Bosnia's three presidents before travelling to Belgrade for similar talks with Serbian leaders. Clinton and Ashton will see Kosovo's leaders on Wednesday. (AP Photo/Saul Loeb, Pool)

  • FILE - In this Jan. 13, 2006 file picture the UBS logo is photographed at UBS headquarters in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Steffen Schmidt, File)

    FILE - In this Jan. 13, 2006 file picture the UBS logo is photographed at UBS headquarters in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Steffen Schmidt, File)

  • FILE - In this March 12, 2008 file photo dark clouds hang above the logo of the UBS in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Alessandro Della Bella, File)

    FILE - In this March 12, 2008 file photo dark clouds hang above the logo of the UBS in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Alessandro Della Bella, File)

  • FILE - In this March 12, 2008 file photo dark clouds hang above the logo of the UBS in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Alessandro Della Bella, File)

    FILE - In this March 12, 2008 file photo dark clouds hang above the logo of the UBS in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Alessandro Della Bella, File)

  • FILE - In this Jan. 13, 2006 file picture the UBS logo is photographed at UBS headquarters in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Steffen Schmidt, File)

    FILE - In this Jan. 13, 2006 file picture the UBS logo is photographed at UBS headquarters in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Steffen Schmidt, File)

  • FILE- City trader Kweku Adoboli, arrives at Court in London in this file photo dated Thursday Sept. 22, 2011,  where he is accused of fraud and false accounting at Swiss banking giant UBS. Adoboli broke down in tears as he took the stand for the first time Friday Oct. 26, 2012, as he insisted he had acted purely to help save the bank he considered his family. Adoboli has pleaded not guilty to all charges against him. (AP Photo/Sang Tan, File)
  • US Secretary of State Hillary Rodham Clinton, centre and High Representative for EU Foreign Policy Catherine Ashton, centre left, speak with EU High Representative Valentin Inzko , second right, alongside US Ambassador to Bosnia and Herzegovina Patrick Moon, right. In the background are EU Special Representative Peter Sorensen, second left and EU Force Commander Major General Robert Brieger, left, prior to meetings at the US Embassy in Sarajevo, Bosnia, Tuesday, Oct. 30, 2012. The top American and European diplomats are on a joint diplomatic tour of the Balkans, urging rival ethnic groups and governments in Bosnia, Serbia and Kosovo to settle their differences for the good of their nations. U.S. Secretary of State Hillary Rodham Clinton was talking Tuesday with European Union foreign policy chief Catherine Ashton in the Bosnian capital of Sarajevo. They are then meeting together with Bosnia's three presidents before travelling to Belgrade for similar talks with Serbian leaders. Clinton and Ashton will see Kosovo's leaders on Wednesday. (AP Photo/Saul Loeb, Pool)
  • US Secretary of State Hillary Rodham Clinton, centre and High Representative for EU Foreign Policy Catherine Ashton, centre left, speak with EU High Representative Valentin Inzko , second right, alongside US Ambassador to Bosnia and Herzegovina Patrick Moon, right. In the background are EU Special Representative Peter Sorensen, second left and EU Force Commander Major General Robert Brieger, left, prior to meetings at the US Embassy in Sarajevo, Bosnia, Tuesday, Oct. 30, 2012. The top American and European diplomats are on a joint diplomatic tour of the Balkans, urging rival ethnic groups and governments in Bosnia, Serbia and Kosovo to settle their differences for the good of their nations. U.S. Secretary of State Hillary Rodham Clinton was talking Tuesday with European Union foreign policy chief Catherine Ashton in the Bosnian capital of Sarajevo. They are then meeting together with Bosnia's three presidents before travelling to Belgrade for similar talks with Serbian leaders. Clinton and Ashton will see Kosovo's leaders on Wednesday. (AP Photo/Saul Loeb, Pool)
  • FILE - In this Jan. 13, 2006 file picture the UBS logo is photographed at UBS headquarters in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Steffen Schmidt, File)
  • FILE - In this March 12, 2008 file photo dark clouds hang above the logo of the UBS in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Alessandro Della Bella, File)
  • FILE - In this March 12, 2008 file photo dark clouds hang above the logo of the UBS in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Alessandro Della Bella, File)
  • FILE - In this Jan. 13, 2006 file picture the UBS logo is photographed at UBS headquarters in Zurich, Switzerland. Swiss banking giant UBS AG announced massive layoffs Tuesday, Oct. 30, 2012, along with huge losses in its third-quarter results, saying it aims to trim as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank. (AP Photo/Keystone, Steffen Schmidt, File)

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 U.S. tax evasion dispute, a scandal over unauthorized trades and a slew of bad investments.

Tuesday’s plan represented a sudden acceleration in this turnaround effort.

UBS AG will cut 10,000 jobs, on top of 3,500 shed last year, as it drops out of trading in fixed income — which includes bonds and currencies — and rejiggers its investment banking.

It will cut 3,000 of those jobs at its U.S. operations along Interstate 95 in Stamford, Conn., near New York City. Another 4,500 will be axed in London, with the remaining 2,500 in Switzerland.

“This decision has been hard, but necessary to create a UBS that is fit for the future,” said Chief Executive Sergio Ermotti.

The need to restructure the investment banking unit was apparent in the bank’s third quarter earnings, released Tuesday. UBS made a 2.17 billion Swiss francs ($2.31 billion) loss in the July to September period, down from a profit of 1.02 billion francs the year before, mainly due to a loss of 3.1 billion francs in investment banking.

“It can’t get better than this point for us to act,” Ermotti said.

With 63,745 employees in 57 countries, UBS said it aims for a headcount of 54,000 in 2015.

Investors welcomed the restructuring announcement, focusing on the savings it will create. UBS stock rose 5.9 percent to 13.89 francs on Tuesday — on top of a 7.3 percent rise on Monday on speculation over the cuts.

Boston University finance expert Mark Williams said UBS “should be applauded for exiting fixed income trading and refocusing on its core competencies.”

In what it called “a significant acceleration” in its transformation, the bank said it would sharpen its focus in the investment bank and appoint a new executive, Andrea Orcel, formerly of Bank of America Corp., to lead it.

The current co-head of the investment bank, Carsten Kengeter, is stepping down from the group’s executive board to unwind the non-core assets.

UBS said it plans to save 3.4 billion francs in costs through 2015 which, when added to the bank’s previous reductions, should amount to annual cost savings of 5.4 billion francs during the same timeframe. That will help offset reorganization costs of 3.3 billion francs over the next three years, including about a half-billion francs in the fourth quarter.

The bank has been under fire on a number of fronts.

In 2008, it was forced to seek a bailout from the Swiss government when it was hard hit by the financial crisis and its fixed-income unit had more than $50 billion in losses.

Former UBS trader Kweku Adoboli has been facing trial in London this month on charges of committing fraud that cost the bank $2.3 billion. He has told the jury that the losses came after senior traders persuaded him to change from a bearish to a bullish point of view in July 2011.

U.S. authorities fined UBS $780 million in 2009 because for helping U.S. citizens avoid paying taxes. The U.S. government has since then been pushing Switzerland to loosen its rules on banking secrecy.

In April, Ermotti said Switzerland’s tax disputes with the United States and some European nations are “an economic war” putting 20,000 jobs at risk.

UBS is also one of several global banks being investigated in the U.S. and other countries for alleged rigging of a benchmark interest rate known as Libor, or London Interbank Offered Rate.

The investment banking unit, meanwhile, is struggling to meet new global rules for banks’ capital reserves.

The new rules require banks to increase the amount of capital they hold to offset risky assets on their balance sheets. That hurts profitability — in the third quarter, UBS booked a charge of 863 million francs to account for these new rules.

Ermotti said the restructuring of the investment banking unit did not represent a retreat by UBS in that field.

UBS investment banking will “continue to be a significant global player,” he said.

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