UBS Is Latest to Get Sucked into the Jobs Vortex
by Paul Springer
Unemployment remains a problem in both the U.S. and Europe, where UBS has announced the slashing of another 3,500 jobs as part of cost-cutting measures.
The bank says the “headcount reductions” will be accomplished through “redundancies as well as natural attrition, and further real estate rationalization,” whatever that means.
“Real estate rationalization” is probably corporate speak for closing offices, a move that leads to strange circumstances for UBS in the U.S. UBS maintains one of the biggest trading operations in the country in Connecticut, a state that Bloomberg says is offering $20 million to not move the jobs to New York:
UBS AG, Switzerland’s biggest lender, promised to keep at least 2,000 jobs in Connecticut under a five-year agreement with the state, in which the company will get a $20 million “forgivable” loan.
The bank could get another $7 million in “forgivable loans” if it hires some people, something it’s not doing in Europe.
The move to New York now hangs in the balance, and Dealbreaker reports seriously differing opinions. On the one hand, some want to stay in Connecticut:
On the “If you people so much as make a move for the door I’ll start cutting off appendages on the front lawn” side were Danny Ryan, a bartender and waiter at Morton’s… [and] Peter Charpentier, who “sells a whole lot of brown-bagged bottles of liquor to UBS employees every evening.”
On the other hand, Dealbreaker says, there are those who’d rather have an office in a hog wallow than Connecticut:
On the “let’s get UBS the f@#$ out of here, seriously I volunteer to help pack” [was] an employee who asked “What’s the big deal? So we move out and a nice big Costco moves in- life goes on.”
Meanwhile, the current trend is toward firing, not hiring. The UBS cuts in Europe bring the severed head count there to 40,000 on the year, Bloomberg says:
European banks are slashing jobs this year six times faster than their U.S. peers, according to data compiled by Bloomberg, as concerns about the creditworthiness of Italy, Spain and France roil financial markets and reduce income from fixed- income trading, stock and bond underwriting as well as mergers and acquisitions.
In the U.S., The Wall Street Journal reports, the toll is being exacted from mid-career workers, in contrast to the old last-hired-first-fired model:
“They’re expensive and relatively expendable,” said Dan Ryan, a partner in charge of the banking practice at executive recruiter Heidrick & Struggles in New York.
The International Business Times notes that banks all over the world are shedding employees, but there will be an uptick at some point according to Peter Maris, principal and financial planner at Resource Financial Group Ltd.:
Looking ahead, Maris said he expects the pace of bank layoffs to persist as more banks exit from non-traditional businesses. Once that painful process is over, layoffs would likely ease in the event that banks loosen their purse-strings, start lending again and restore profit growth.
Great, but when? It seems like such a Renaissance was supposed to come after the U.S. government printed up billions of dollars for big banks after the global financial crisis. That turned out to be a good trade for people who happen to own banks, not so good for the people who have to work for them. Their loans will not be forgiven.
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