UBS will drop most of its commodities business and cut its involvement in proprietary trading, leaving a further 2,000 workers at the troubled bank jobless.

The Swiss bank has already announced 7,000 job cuts after losing $42 billion (£23.7 billion) in the fallout from the sub-prime loans debacle in the United States.

Jerker Johansson, the new chief executive and chairman of UBS's investment bank, which was responsible for the bulk of the bank's losses, was appointed in February from Morgan Stanley to turn the business around. After a review, he said on Friday that the investment bank would lose most of its commodities operations, including power, gas, agriculturals and base metals. It will keep its precious metals operations because it is integral to the bank's position as the world's biggest wealth manager.

The bank said that it would “substantially downsize” its property and securitisation operations and cut trading on its own account. Mr Johansson said that he would continue to build the equities business.

Most of the job losses are likely to be front-line fixed-income roles because the bank is maintaining its back office and control staff. Mergers and acquisitions and underwriting are likely to be unaffected.

UBS has cut about a quarter of its investment banking staff since the start of the credit crunch. It is embarking on a new strategy of running UBS as three separate divisions — wealth management, asset management and investment banking — rather than as one bank. It has resisted calls from investors to hive-off investment banking and sell it.

Mr Johansson said on Friday that UBS remained committed to investment banking: “The events we have seen in the last couple of weeks have strengthened the case for business models of banks that combine a deposit base with a well-functioning investment banking franchise.”

The new strategy would make the investment bank both more autonomous and more accountable, he said.

At Thursday's extraordinary meeting, UBS said it would end 2009 in profit and would pay dividends again in 2010. Mr Johansson refused to rule out further writedowns, however.

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