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UBS to Cut More Jobs as Losses Continue

The Swiss banking giant estimates it will report a first-quarter loss of almost 2 billion Swiss francs and will reduce headcount in 2010 by 8,700 positions.

Updated from 2:05 a.m. EDT

Swiss banking giant



estimates it will report a first-quarter loss of almost 2 billion Swiss francs ($1.75 billion) and will reduce headcount in 2010 to 67,500 from 76,200 at the end of March.

In a statement Wednesday, UBS said the loss stems from a negative contribution of about 3.9 billion Swiss francs from losses on previously disclosed illiquid risk positions, credit loss expenses and certain valuation adjustments.

The bank said it is planning cost savings by the end of 2010 of about 3.5 billion to 4 billion Swiss francs compared with 2008 levels.

UBS also said it will exit "high-risk and unpromising businesses," and is currently conducting a review of its operations.

The Swiss bank said it will close the first quarter with an overall outflow of net new money. The bank's wealth management & Swiss bank division recorded a net outflow of about 23 billion Swiss francs. That occurred mainly after the announcement of a settlement with U.S. authorities over their investigation into UBS's alleged assistance to wealthy Americans seeking to avoid paying U.S. taxes.

In prepared remarks in advance of the company's annual shareholder meeting, new CEO Oswald Gruebel said the bank knows where it has to set to work.

"It will be a long road back to success without any quick fixes," said Gruebel. "Rather, we will move forward step by step in a rigorous and disciplined manner."

The bank said it still expects to have a tier 1 capital ratio of about 10% at the end of the first quarter.

The latest round of job cuts comes on top of a reduction of about 11,000 jobs announced since October 2007.