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Deutsche Bank Considers Up To 20,000 Job Cuts (#GotBitcoin?)

Job losses would likely take place over more than a year, with the pain and costs spread across regions and businesses. Deutsche Bank Considers Up To 20,000 Job Cuts (#GotBitcoin?)

Deutsche Bank AG is weighing whether to cut 15,000 to 20,000 jobs, or more than one in six full-time positions globally, according to a person familiar with high-level discussions about the latest attempts to turn around the struggling financial giant.

The cuts being contemplated by senior executives reflect an acceleration of Deutsche Bank’s downsizing and another major pullback from its global ambitions. If followed through, the reduction would represent 16% to 22% of Deutsche Bank’s workforce of 91,463 employees, as disclosed by the bank as of the end of March.

Such deep cuts, which are being debated internally, would likely take place over more than a year with the pain and costs spread across regions and businesses, people close to the bank said. They expect a heavy toll on the bank’s U.S. operations and the investment bank in general.

The internal discussions show Deutsche Bank’s dire straits, buffeted by dismal profit expectations and exasperated investors looking for a reason to believe in the shares. Besides challenges in its core business, the bank faces a wide-ranging probe by U.S. law enforcement into money laundering allegations. U.S. House committees have also demanded details of the bank’s lending relationship with President Trump and others close to his administration and businesses.

One positive nudge came Thursday when Deutsche Bank’s U.S. subsidiary passed Federal Reserve stress tests. Last year, it was the only bank subject to the tests to outright fail a leg of the exams, with regulators citing deficiencies in capital planning and risk controls.

Details of the staff reductions remained in flux in recent days as bank officials debated strategic options, projected costs and calculations such as regulatory capital needs, according to people briefed on discussions inside the bank.

A Deutsche Bank spokesman declined to comment on any specific plans. The bank is “working on measures to accelerate its transformation” and will “update all stakeholders if and when required,” he said.

The downsizing probably would include job attrition, the people said. Large-scale cuts would go deeper than voluntary departures, people close to the bank said. The expense of eliminating jobs depends in part on employment contracts, including those involving strong labor unions in Germany, and up-front severance payments.

Bank officials want to make decisive changes that show they take investor concerns seriously. But they would like to do so without raising fresh capital, which would dilute shareholders, some of the people said. Investors have endured several rounds of share issuance in recent years. The bank’s shares have rebounded slightly in recent weeks, but trade not far above record lows.

Deutsche Bank has told investors to expect details of an overhaul by the time second-quarter earnings are released on July 24. Bank executives are discussing moving sooner to address uncertainty inside the bank. Some employees in the bank’s equities department, anticipating cuts, have cleared personal belongings from their desks, and salespeople have curtailed client calls and meetings, according to people inside the bank.

Investors and analysts have been calling for Germany’s biggest bank to ax money-losing businesses and pull back from underperforming ones. Last month Chief Executive Officer Christian Sewing promised “tough cutbacks” in the investment bank, which generates about half the bank’s revenues but has suffered high costs and lost market share.

A flurry of departures of top executives from its investment bank has highlighted the risks of trying to shrink the bank without losing key clients.

The investment bank, which had about 38,000 full-time employees at the end of March, is expected to take a big hit in any downsizing.

The bank’s global equities operation, which has steadily lost clout to U.S. banks with stronger balance sheets, lost about €750 million in 2018, the Journal reported in March.

Internal data on staffing levels show the business has about 1,050 employees in sales and trading roles, including about 300 in the U.S. That doesn’t include hundreds of employees globally in support and research roles, some producing reports for equities-trading clients. The equities staffing level is already about 21% lower than from the start of 2018.

In 2015, under former Chief Executive John Cryan, the bank pledged 15,000 job reductions that never fully materialized.

In May 2018, Mr. Sewing said the bank’s full-time workforce would fall “well below” 90,000 by the end of 2019. The bank cut about 5,800 full-time positions last year, disclosures show. Deutsche Bank Considers Up,Deutsche Bank Considers Up

 

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