Banking giant UBS has announced plans to cut 5,500 jobs.
Over the next year, the bank is set to cut 2,600 staff in investment banking, and 2,900 across wealth management, asset management and corporate banking functions, a spokesperson confirmed to CIO sister title Computerworld UK.
The investment banking cuts are due to come mainly from redundancies, the company said, but the 2,900 other cuts will come from redeployment and other forms of attrition.
There are no further details on which roles are likely to be cut, but the cuts are likely to be mainly in Europe and the US.
There is growing concern that the bank is likely to cut trading IT functions, as well as relocating back office work following a dramatic expansion of its Indian offshore operations last year.
The cuts follow a challenging year for the bank, which has made £19 billion worth of writedowns. In the first quarter of this year, the bank made a loss of Sfr 11.5 billion (£5.6 billion).
Calling UBS “one of the banks worst affected" by the credit crisis, Chris Skinner, chief executive at think-tank Balatro, said a number of the cuts would be likely to affect trading operations, following moves made by other banks recently.
“There is a move to more and more algorithmic trading. A recent report speculated that by 2015 nine out of 10 traders would be redundant, and systems would be doing their jobs, but I think this is an exaggeration. You’re only as good as a system set up by people.”
There has been much speculation over the future of algorithmic trading, heavily used by hedge funds, after a computer model's failure to deal with the unpredictable markets led a Goldman Sachs fund to lose £750 million last August.
UBS may be likely to reduce the staff working on back office functions, Skinner suggested, adding that many banks in UBS’ position were automating back office functions. “A lot of people still have documents held in paper repositiories and there’s a lot of manual box-ticking.”
Last year, UBS announced it was expanding its back office operations in India in a bid to cut costs.
But Skinner said with so much being stored on paper, there were clear limits to where banks such as UBS could outsource. “If you need a paper document urgently, it’s no good having it in India,” he said.