"This has to be seen in the overall cost-cutting plans of the group," a company spokeswoman was quoted as saying.

The bank did not say whether any other parts of its business in Luxembourg will be affected.

UBS’s Luxembourg operations were affected by the exposure of the Swiss bank’s Luxalpha fund to the US Ponzi scheme fraudster Bernard Madoff, whose activities are estimated to have cost up to $65 billion, according to the news service. His fraud also hit a number of other banking and wealth management institutions.

The Swiss bank has already announced a round of job cuts as it seeks to slash costs and rebuild its balance sheet, having been hit by almost $50 billion in write-downs from the credit crunch, as well as suffering from the fallout of a legal dispute over helping wealthy US citizens evade taxes. Earlier this year, UBS said it expected to cut its total workforce to about 67,500 in 2010. At the end of March 2009, UBS employed 76,200 people in over 50 countries.

Last week, the Luxembourg regulator approved changes it had asked for in the wake of the scandal, saying UBS had provided proof and guarantees of having put in place the necessary internal rules.

Investors in Luxembourg lost $1.7 billion to Mr Madoff, mainly via Luxalpha, the report said.