Swiss banking giant UBS announced Tuesday it would cut its workforce by 5,500 over the next year and sell a $15 billion chunk of its risky mortgage assets to BlackRock Inc., after reporting first-quarter losses due to the U.S. subprime crisis.

UBS, the worst-hit bank worldwide by the subprime crisis on its massive $19 billion write-downs, said its net loss reached 11.54 billion Swiss francs ($10.99 billion), compared to a profit of 3.03 billion francs a year earlier.

The group said in a statement it's planning to cut 2,600 jobs in its investment banking unit by the end of the year and around 5,500 - or 7 percent of its workforce - across the group by the middle of 2009.

Apart from the investment banking unit, job losses will be spread across wealth management, asset management and its corporate center.

The bank also said it plans to exit the municipal bond business and sell $15 billion in distressed assets to a newly created fund managed by BlackRock Inc. UBS had a net loss of 11.5 billion francs ($10.9 billion) in the first quarter.

UBS said the year had begun with tough business conditions which it expected to continue.

The impact will affect all of UBS's businesses and it requires the firm to manage costs, resources and capacity very actively, the bank said.

UBS Chief Executive Officer Marcel Rohner said the turnaround at the bank has already begun.

We can see tangible effects as a result of our initial responses to the losses, Rohner said in a statement.

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