UBS AG plans to cut another 7,500 jobs, bringing total staff reductions to almost 20% of its work force amid mounting losses and customer defections.
The Swiss banking company remains in a "precarious situation" after clients withdrew $20.1 billion from the main wealth management unit and the company reported a first-quarter net loss of $1.76 billion, chairman Peter Kurer, who stepped down Wednesday, told shareholders at the annual meeting.
Chief executive officer Oswald Gruebel, who was recruited out of retirement in February, plans to save as much as $3.5 billion by the end of next year after UBS took the biggest credit-related writedowns of any European bank.
UBS said that it is doing a review to quit some "high-risk" businesses and capital market locations.
The company plans to maintain operations in international wealth management and Swiss banking, alongside asset management and investment banking.
"It will be a long road back to success, without any quick fixes," Gruebel said in a speech at the annual meeting. "Markets remain extremely unstable. That's why we are acting today by rigorously adjusting the size of our bank and cutting costs significantly once again."
UBS, which as late as February said that it would return to profitability this year, said the first-quarter loss stemmed mainly from a $3.4 billion writedown on illiquid holdings.
Gruebel said the company must "avoid loss-making businesses"; reduce the balance sheet and risk-taking at the investment bank but maintain equities, foreign exchange, corporate finance and merger advice.
A settlement with U.S. authorities under which UBS handed over the names of about 300 American clients in February led to more withdrawals from the main wealth management and Swiss bank units in the first quarter. Wealth management in the Americas gained clients with about $14.1 billion of assets after the bank hired 400 brokers in the fourth quarter.
UBS last month reported an $18.4 billion loss for last year, the biggest ever at a Swiss company. It has taken more than $50 billion in writedowns and losses overall since the start of the financial crisis and has raised more than $32 billion from investors, including the Swiss government.
UBS has announced 11,000 job cuts in the past 18 months. It employed 76,200 people at the end of March and 83,839 at its peak a year ago.
Gruebel this month hired Ulrich Koerner — a former colleague who helped him turn around Credit Suisse Group AG six years ago — to be chief operating officer and cut administrative expenses.