UBS shares plunge on 8,000 job losses warning

17 March 2008

Swiss bank UBS' shares have fallen by the most in nine years after a newspaper reported that as many as 8,000 jobs could be lost at the bank.

According to the newspaper SonntagsZeitung, UBS is likely to cut between five and ten per cent of its current workforce after already axing 1,500 jobs.

In Swiss trading, shares dropped by 11 per cent following the reports at the weekend - a fall not seen since September 1998 - although prices rallied slightly later.

The newspaper also suggested that the bank would propose a capital increase at its shareholders meeting next month.

Although UBS told Thomson Financial that it had held a meeting to discuss its wealth management and business banking, including cost-cutting, the bank would not confirm any job cuts.

"We cannot rule out that we will some day move in that direction," a spokesman said. "However, there is no concrete programme yet."

He would not comment on whether a capital increase is on the cards.

Meanwhile UBS is in for more trouble after the Wall Street Journal reported it is being sued by an investor, who alleges the bank did not make clear the risk of investing in auction-rate notes.

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