UBS may cut its workforce by up to 10 per cent across much of its investment banking and trading operations, sources say, while the Swiss bank announced a dividend cut and rebuffed calls for its business lines to be broken up. The Zurich-based bank, which has about 22,000 employees worldwide in its UBS Investment Bank arm, may make the cuts as part of its attempt to strengthen its financial position, sources familiar with the matter told Reuters. UBS did not comment. The Swiss bank has announced $19 billion of write-downs related to mortgage and credit exposure. These losses, in addition to $18 billion of markdowns last year, further weakened the bank as financial markets broadly face several more difficult quarters. Its problems have prompted speculation that UBS will struggle to retain clients and managers. UBS has cut its dividend. On Wednesday, the bank said the payout will be one new share for every 20 shares, valuing it at around SFr1.69 ($1.68) at Tuesday's closing price. The dividend is down 23 per cent from the previous year's SFr2.2 cash payment, when UBS also had a hefty share-buyback programme. Shareholders will be able to trade their entitlements to the dividend up to 9 May 2008. Meanwhile, UBS Investment Bank vice chairman Phil Gramm, a former US senator who became a senior dealmaker in 2002, said he did not expect the Swiss bank to heed critics who want it broken up. "I think that our businesses reinforce each other," Mr Gramm told Reuters. "I think in the end it won't happen." The bank’s chairman-designate, Peter Kurer, currently general counsel to UBS, said it needs three years to repair the reputation damage suffered after it bet massively, and wrongly, on the US mortgage market and became the world's hardest-hit bank from the subprime crisis. "We shouldn't fool ourselves," Mr Kurer told the Financial Times in an interview. "We can't pretend that there has been no reputation damage. Experience says it goes away after two or three years." Mr Kurer is expected to assume the chairmanship after the group's annual shareholders meeting on 23 April.