Swiss banking giant, UBS AG, announced plans to slash 10,000 jobs over the next several years has it pares back its investment banking franchise.

The bank announced its third quarter results today, recording a pre-tax profit of 1.4 billion Swiss francs, but slashed that to a CHF 2.5 billion ($2.67 billion) loss by taking impairment charges of CHF 3.1 billion related to goodwill and other non-financial assets, as it plans to accelerate its strategic overhaul. It’s also taking a credit charge of CHF 863 million, due to significant tightening in credit spreads over the quarter.

The charges comes as it plans to exit business lines, predominantly those in fixed income that it says have been rendered “uneconomical” by changes in regulation and market developments. As a result, by 2015, UBS is likely to employ around 54,000 people, down from 64,000 today, it said.

It also aims to reduce risk-weighted assets further, to below CHF 200 billion, by the end of 2017; and, says its investment bank will operate with RWAs of less than CHF 70 billion effective starting in 2013. The bank also hopes to generate CHF 3.4 billion in annual incremental cost savings, with total savings of CHF 5.4 billion by 2015.

The lines of business to be exited will include “many that do not meet their cost of capital sustainably or are in areas with high operational complexity or long tail risks likely to weigh on future returns,” the bank says. The exited businesses and positions will be transferred to a new division in the first quarter of 2013, which will be led by Carsten Kengeter, and will manage the sale or exit of these positions. As a result, Kengeter will step down from the executive board, and Andrea Orcel will become the chief executive of UBS’s investment bank.

“The strong progress we have made over the last 12 months allows us to begin implementing this next phase of our strategy. We are ahead of schedule in our plans to build additional capital strength and reduce both costs and risk-weighted assets. The opportunity we have today to accelerate the transformation of our firm is one that I believe is unique – and one that will allow us to continue to unlock the full potential of our franchise,” said UBS CEO, Sergio Ermotti.

Also, UBS said it will continue to strengthen its risk control, compliance and regulatory functions.