UBS posts loss and cuts 8,700 jobs

By Lisa Jucca and Oliver Hirt

ZURICH (Reuters) - UBS AG will cut its staff by 11 percent as it moves to stem losses and client withdrawals, its chief executive said Wednesday, warning Switzerland's No.1 bank still faces an uncertain future.

Chief Executive Oswald Gruebel said the bank will post a first-quarter loss of nearly 2 billion Swiss francs (1.16 billion pounds), mainly due to writedowns and outflows at its prized wealth management unit.

He announced plans to cut staff to 67,500 in 2010, from 76,200 last month, in a bid to save up to 4 billion francs.

The new job cuts come on top of thousands already announced during the crisis and mean UBS will have shrunk its workforce by almost a fifth from a headcount peak of 83,800 a year ago.

"Unfortunately I am not able -- as yet -- to offer you any good news. Instead I am forced to present you with another round of unsatisfactory performance figures and to announce further drastic measures," Gruebel told nearly 5,000 UBS investors gathered in Zurich for the bank's annual shareholder meeting.

"Our outlook remains cautious and we face many uncertainties," he said. Gruebel, the former Credit Suisse boss, pulled out of retirement in February to get UBS back into shape.

UBS shares, which rallied Tuesday on expectations of big job cuts, closed down nearly 7 percent at 12.36 Swiss francs. The DJ Stoxx European banking index shed 2 percent.

"The result is a huge disappointment. After the unexpectedly good figures from Goldman Sachs and Wells Fargo and optimistic comments from Deutsche Bank about the first months, we were expecting at least a flat result from UBS," one trader said.