Deutsche Bank Begins Sack of 18,000 Workers

Deutsche Bank began staff trimming on Monday, a move that will affect 18,000 workers from Sydney to New York.

The downsizing is part of a 7.4 billion euro ($8.3 billion) “reinvention” that will lead to yet another annual loss, a plan that knocked its already battered shares.

Germany’s largest lender said on Sunday it will scrap its global equities unit and cut some of fixed income operation in a retreat from a long-held ambition to make its struggling investment bank, with 38,000 staff, a force on Wall Street. Deutsche Bank has almost 91,500 staff around the world.

Its shares erased early gains and closed down 5.4% in Frankfurt after its finance chief flagged “significant uncertainty” over breaking even in 2020. Its bonds also fell. U.S.-listed shares dropped 5.8%.

Ratings agency Fitch said that the bank’s future credit rating will depend on how successfully it executes the plan.

“The restructuring measures involve large staff cuts and significant leadership changes, which could disrupt the aim to improve core earnings,” it said in a note published Monday.

Hundreds of employees at the bank’s Wall Street office were summoned to the building’s cafeteria on Monday morning to learn their fates, sources within the bank told Reuters.

During one-to-one meetings with management and human resources, they were told they were being laid off and informed of their severance terms, the sources said.

One employee outside Deutsche Bank’s office told Reuters that staff in the bank’s equity sales division had been preparing for the worst.

“People have been planning their next moves but it’s a tough market,” the worker said, speaking on condition of anonymity.

Deutsche Bank had been one of the few European banks to maintain a significant presence in the United States after the 2007-2009 financial crisis. However, it has struggled to compete with U.S. rivals, hampered by regulatory investigations and litigation.

Deutsche Bank said it remained committed to the United States, its second-biggest market.

“We will retain a significant presence here and remain a close partner to our U.S. clients and to international institutions that want to access the U.S. market,” it said in an emailed statement.

July 08, 2019