Responsible for billions in write-downs from sub-prime, commerical and other mortgage-backed securities, real estate bankers kicked off the New Year a bit nervous around the office. This week UBS showed why.

CEO Marcel Rohner issued an internal memo on a massive restructuring at the Swiss giant — aimed squarely at reining in real estate activities.

Here’s what Rohner said:

On Real Estate and Securitization:

“We have already improved efficiency and expect a total headcount reduction of close to 50% from the peak of last August. We will reduce balance sheet utilization by two-thirds, strengthen risk discipline by creating a dedicated risk management position, and enable our staff to focus on building a leading client-driven franchise for 2008.”

On MBS/ABS Sales and Trading:

“We have already scaled back our origination activities, including the closure of UBS Home Finance, as we believe this market does not offer profitable new issue opportunities at this time.”

On the Real Estate Workout Group:

“In order to ensure robust risk management of our legacy positions, we will be segregating our existing illiquid MBS, ABS and CDO portfolios into a newly-created workout group…Our aim is to reduce exposure to this asset class in an orderly manner while minimizing further downside risk.”

On Real Estate Finance:

“The REF group will focus on providing commercial real estate finance with the intention of distributing our risk via the securitization or loan syndication markets.”

(Image: Marcel Rohner of UBS  at a news conference in Zurich in 2006. Reuters file)