UBS people fear April's cuts after harsh ratings: "We're totally nervous"
UBS has already cut 4,200 jobs and $7.5bn of costs since acquiring Credit Suisse, but as people working there are acutely aware, that wasn't the end of the matter. There are another $5.5bn of costs to come out; $2.5bn this year and $3bn next.
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Some of those costs are expected to be removed in a round of job cuts anticipated in the next few weeks. UBS isn't commenting, but multiple insiders at the Swiss bank another round is due in April.
"People are totally nervous," says one UBS insider. "We're expecting cuts to come across the organisation."
Results to recent annual appraisals have increased the trepidation. UBS ranks people between one and three for performance, with one being the worst ranking. Multiple insiders say that the proportion of people ranked as one increased dramatically this year. "It seems to have gone from 10% of people to maybe 15%-20% of the total," says one. There are additional, unconfirmed allegations that ex-Credit Suisse people were disproportionately and unfairly hit with the lowest ranking in order to manage them out.
Not everyone is in agreement that former Credit Suisse people are being unfairly targeted, though. One managing director (MD) says: "You have to do a pretty bad job to get ranked as one at UBS." Another says people are complaining simply because they're not used to the stricter way that UBS measures performance.
Disgruntlement is being amplified by the perception that a cohort of senior people are still being very well rewarded. Average bonuses paid to UBS's 835 key risk takers rose by 27% last year to $1.4m. Pay for CEO Sergio Ermotti was $16.8m, making him the highest paid bank CEO in Europe. "We feel let down because the CEO and senior people have a massive payout, but they're cutting the rank and file. It seems a bit inconsistent with the cost-cutting exercise," says one.
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