[ by Larry Goldfarb ]

UBS announced plans to cut around 10,000 jobs and close its fixed income business amounts to decimating its investment bank;  prior to the financial crisis, the investment bank in general and the fixed income group in particular was the engine for growth within the UBS Group.

The job cuts represent around 15 percent of the group's current headcount of 64,000, and roughly 40-50% of the investment bank employees.  Sergio Ermotti, brought in as chief executive of the Swiss bank just over a year ago, said Tuesday that the cuts were "the most painful part of what we are going through."

The bank's New York, London and Zurich offices will be worst affected by the cuts, as the investment banking operations are concentrated there.  Mr. Ermotti said, "We want to do more than just a pure cost-cutting exercise. We want to be more effective and efficient in everything we do."

The job cuts were motivated by the following:

• A quarterly net loss of 2.2 billion Swiss francs ($2.4 billion) Tuesday morning.
• Increased "visibility about the regulatory framework" for European banks
• The deterioration of the macroeconomic situation.
• The reputational hit from Kweku Adoboli, who is currently on trial in London over trading alleged to have caused the bank $2.3 billion of losses.
• Saving around 3.4 billion Swiss francs annually by 2015 through shutting down the fixed income business.

For further information, please read [CNBC, 10/30/12].