UBS pares investment banking, to cut 2,000 jobs

By Emma Thomasson and Joseph A. Giannone

ZURICH/NEW YORK (Reuters) - UBS AG (UBSN.VX) said it is cutting another 2,000 jobs at its troubled investment bank and closing most of its commodities business but will remain a universal bank and will not quit investment banking completely.

The news on Friday comes just a day after the world's biggest wealth manager said it made a small profit in the third quarter after a year of losses, suggesting it had started to turn the corner even as the credit crisis engulfs other banks. [nL2318667]

The 2,000 job losses come on top of 4,100 investment banking positions cut in the past year. Forays by the investment bank into risky assets like U.S. subprime mortgages have forced UBS to write down $42 billion -- the most of any bank in Europe.

A spokeswoman said the cuts would mostly fall in the United States and Britain, where they would be carried out "swiftly" and mostly through redundancies, with a target completion date of the year end. Some jobs will also go in Asia and Switzerland.

The cuts mean UBS will have reduced its investment banking workforce by about a quarter to 17,000 since peaking in the third quarter of 2007, while the bank will have cut its total headcount by more than 10 percent to under 80,000.

The latest move comes a week after HSBC (HSBA.L) announced 1,100 investment banking job cuts and follow tens of thousands of job losses across the global financial industry, which is in its worst crisis since the Great Depression. [nL3339856]

Jerker Johansson, chief executive of UBS's investment bank, told Reuters in an interview that UBS was determined not to sell the business, which he said he was positioning to make a profit in 2009 despite the worsening industry outlook. [nWEN8759]

UBS's shares extended gains after the comments and were up 6.6 percent at 22.70 Swiss francs at 1302 GMT, when the DJ Stoxx European banking sector index .SX7P was up 3.4 percent. UBS had already rallied on Thursday's news of a quarterly profit.