The investment bank will aim for headcount of about 16,000 in the future, Ermotti said. The reduction from 17,878 at the end of September will be achieved through the about 1,600 job cuts announced in August, and as the bank exits or scales back businesses and through attrition, he said.

UBS will expand in wealth management, targeting an increase in client advisers to 4,700 from 4,252 at the end of September. UBS adjusted its expectations for earnings and new assets as the economic slowdown makes its wealthy clients more risk averse.

The goal for gross margins, or the amount of revenue the bank makes on assets under management, was changed to between 95 basis points and 105 basis points from an earlier target of more than 100. A basis point is a hundredth of a percentage point.

UBS aims to attract net new money of between 3 percent and 5 percent of assets under management annually, compared with about 5 percent previously. UBS's wealth management Americas business, which is run by Robert McCann and includes the former Paine Webber Inc., is not up for sale, Ermotti said.

The return on equity target compares with a goal of 15 percent to 20 percent announced two years ago.

UBS, which abandoned its previous profit goals in July, isn't alone in cutting targets and shrinking its securities arm. Zurich-based Credit Suisse Group AG, Switzerland's second- largest bank, said earlier this month it will eliminate about 1,500 positions, in addition to 2,000 announced in July, and trim risk-weighted assets by 110 billion francs, including almost 100 billion francs at the fixed-income unit, by the end of 2014.

'Tricky' Execution

Credit Suisse cut its return-on-equity goal in February to more than 15 percent from more than 18 percent previously, citing stricter regulation and challenging markets. Barclays Plc set an ROE target in February of 13 percent for 2013, down from an average of 18 percent over the past 30 years.

"Everybody is doing the same thing" because Basel III rules are hard on investment banks, said Christopher Wheeler, a London-based analyst at Mediobanca SpA. "It's a massively complex execution of getting out of businesses without damaging the franchise that you want to keep, keeping up the morale of people, avoiding losses on the rundown of the books. It's going to be very tricky indeed."

The shift in strategy coincides with another round of management upheaval at UBS, which was ravaged by more than $57 billion of credit-related losses during the financial crisis of 2008. Wheeler cut his rating on UBS to "underperform" from "outperform" after the September departure of Gruebel, 67. Chairman Kaspar Villiger is leaving in 2012, a year earlier than planned, to make way for former Bundesbank President Axel Weber in the role.