A story published in Bloomberg citing an unnamed source, said the bank will cut 16 per cent of its workforce as the uncertain economic climate roils markets.UBS had 63,250 employees in June.

The cuts are expected to roll out through the next several quarters, and may be announced during UBS' third-quarter earnings results tomorrow.

The bank suffered losses of US$42 billion during the global financial crisis, after heavy exposure to US sub prime debt, and was bailed out by the Swiss government.

Last year UBS lost a further US$2.3 billion, due to bad trades made by alleged rogue trader Kuweku Adoboli. The saga prompted chief executive Oswald Gruebel to resign.

The Swiss government have demanded that UBS and rival Credit Suisse increase their capital ratios and cut risky assets, which is among the reasons reported for the job cuts. 

It is not clear which regions will be affected by the cuts. UBS declined to comment.