UBS axes 5,500 jobs as it sells down subprime

By Thomas Atkins

ZURICH (Reuters) - UBS said it would axe 5,500 jobs and sell billions of dollars of ailing assets in a bid to break free from the subprime crisis.

The job cuts, coming on top of 1,500 already completed, will reduce the Swiss bank's workforce by an additional 7 percent.

Most of cuts will hit U.S. and UK investment banking as it hacks back the business lines that made it Europe's biggest casualty of the subprime crisis.

"In terms of large-scale reductions, I do not forsee anything (but) you will never have certainty that we are done," Finance Chief Marco Suter told Reuters after the announcement on Tuesday.

"In the investment bank, that's just the name of the game: hire and fire."

UBS unveiled a preliminary deal with U.S. asset manager BlackRock Inc to sell for $15 billion a portfolio of subprime mortgages with a face value of $22 billion.

The bank said the sale was a signal the market for ailing U.S. real-estate loans is recovering.

Shares in the world's largest wealth manager fell as much as 5 percent as investors worried the crisis had ravaged UBS earnings power, shown by a sharp slowdown in new money entrusted to it by its large base of rich clients.