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‘Reinventing’ Deutsche Bank begins staff layoffs
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Deutsche Bank laid off staff in Asia as it began cutting 18,000 jobs as part of a 7.4-billion-euro (US$8.3 billion) “reinvention” set to tip Germany’s largest lender into yet another annual loss.
In a retreat from a long-held ambition to make its struggling investment bank, which employs 38,000 people, a force on Wall Street, Deutsche Bank said on Sunday it would scrap its global equities operations and cut some in fixed income.
Shares in Deutsche Bank, which has almost 91,500 staff around the world, were slightly lower in Frankfurt as the bank’s finance chief said there was “significant uncertainty” whether it would break even in 2020.
Chief Executive Christian Sewing told journalists from the bank’s London office, where many of the cuts are expected, that he was “doing nothing short of reinventing” Deutsche Bank, which will have been in the red for four out of the past five years as it dealt with a series of setbacks.
Bankers seen leaving Deutsche Bank’s Sydney office yesterday said they had been laid off. Sewing said job cuts would continue in London and New York.
JP Morgan analysts called the plan “bold and for the first time not half-baked” but questioned the credibility of execution, revenue growth and employee motivation.
Significant challenges
Ratings agency Moody’s said Deutsche Bank faced “significant challenges” to executing the plan swiftly and said it would keep its negative outlook on the bank. “It’s a risky manoeuvre but if it succeeds, it has the potential to bring the bank back on course,” a person close to one of the top 10 biggest shareholders said.
Deutsche Bank gave no geographic breakdown for the job cuts, although the bulk are expected in Europe and the United States.
In Sydney, Hong Kong and elsewhere in the Asia-Pacific region, the working day began with cuts. And several Deutsche bankers said entire teams in sales and trading were going.
A person with knowledge of the bank’s Australia operations said its four-strong equity capital markets team was being disbanded, but most of its mergers and acquisitions team was not affected.
Deutsche had some 4,700 staff members at its main regional offices in Sydney, Tokyo, Hong Kong and Singapore, factsheets on its website showed. Its investment banking team for the Asia-Pacific region had about 300 people before the cuts, of which 10 percent to 15 percent will be laid off, almost all in its ECM division.
One laid-off equities trader in Hong Kong said the mood was “pretty gloomy” as people were called into meetings. “They give you this packet and you are out of the building,” he said.
Several workers left offices holding envelopes with the bank’s logo. Three employees took a picture of themselves beside a Deutsche Bank logo outside, hugged and then hailed a taxi. “If you have a job for me please let me know. But do not ask questions,” said one Deutsche employee.
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