Swiss bank UBS has been struggling for years to redeem its trading business that recorded almost $50 billion in losses during the financial crisis. And on Wednesday, Sergio Ermotti, UBS chief executive, has finally announced a measure to cut their losses: he fired nearly 10,000 people, worldwide.
Nothing out of the ordinary here: job cuts are, unfortunately, a usual way of “cutting losses” for many companies, and for UBS, the move was long due. In fact, analysts even say that Ermotti is steering UBS in the right direction.
“The decision hurts, but it is right, unavoidable,” wrote Blick.
Still, the problem is not necessarily that UBS cut the jobs, it is how. According to various staff reports, many employees were unaware of the restructuring plans, and found out they were fired on Monday morning, when they showed up for work.
“Some staff turned up to work to find their employee cards no longer worked at the turnstile and were then escorted to human resources, according to various sources within the bank,” Reuters reported.
On Special Leave, Not Terminated
Later, staff took to social media to air their frustration, and papers caught up quickly, reporting in detail the brutal way in which the bank sent thousands of its employees “on special leave:”
“It was like a scene out of the Village of the Damned up there,” one of the bankers told The Telegraph. “They said we would be getting two weeks paid leave and then we will be told what is to happen. I expect we’ll just get a call from human resources or lawyers telling us how much we are worth. We won’t be able to talk to our bosses.”
UBS Employees in London received a “private and confidential”, albeit impersonal letter bidding them goodbye, a letter that somehow lost its status of private document, and can be now seen on many UK mainstream publications.
Among others, the letter stressed that the receiver’s employment “has not been terminated:”
“Consultation with the UK Employment Forum (UKEF) regarding the restructuring of the FICC business will now commence and we will be in contact with you again regarding the impact of this restructuring exercise once we have reached the appropriate stage in our collective consultation process. We anticipate that this may take a number of weeks.”
The letter goes on, stressing that the bank appreciates that the communication was unexpected, and understands how difficult this period will be for those affected, but that support will be available both inside and outside of UBS.
Shut Up, and Take Your Medicine
In the letter, employees on special leave are also requested to refrain from entering UBS premises. Other requests include not attending meetings regarding UBS matters; not discussing UBS client issues with anyone; and, naturally, not talking to the press: “media inquiries should be directed to Media Relations without any comment.”
You have to actually read the letter to grasp the depth of the insult, but for many people this came as no surprise:
#ubs has a history of treating its employees badly. Suicide and bankruptcy prevention leaflets if you are lucky.
— RR (@ratcliri) October 31, 2012
#UBS fires staff by disabling key fobs today. Up there with dumping your girlfriend by fax. Says it all about banking culture. #bankers
— Will Neale (@WillNeale) October 31, 2012
EPIC fail by UBS in London to treat 100 redundant staff with dignity and respect. They found out when their security passes didn’t work #UBS
— Becki Houlston (@beckiworld) October 31, 2012
And Sky News Business Presenter Joel Hills tweeted:
UBS jobs losses not a nip and tuck – it’s butchery. 1/6 of workforce is set to be laid off as bank retreats from investment banking.
— Joel Hills (@joelhillssky) October 30, 2012
How will this PR fail affect UBS – give it a month or two, and if the cuts really show improvement for the bank’s shareholders, the story will be forgotten. But 10,000 people could tell a louder story if they will. If legal matters don’t scare them, “U’ve Been Sacked” will become more than an acronym – probably the new brand name for UBS.
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