- The investment bank has counted low on earnings and made huge losses over the previous two quarters.
- The lender has also trimmed seven thousand employment last year.
Deutsche Bank has drawn up plans to cut between 15,000 and 20,000 jobs as per the reports. This arises as part of the effort of Chief Executive Christian Sewing to reduce dramatically the investment banking division of the lender.
The reduction in headcount would be equal to approximately half of all Deutsche investment banking jobs, although it is uncertain whether the cuts will also impact the other departments of the bank. It represents about a fifth of the Deutsche’s total workforce of nearly 91,000. The lender has also trimmed seven thousand employment last year. Top-level talks about the restructuring took place on Thursday and Friday, but no final decisions have been made as now, a source close to the matter told Reuters.
Deutsche Bank is completing a plan that may result in the elimination of hundreds of positions in equities trading as well as the research department, and derivatives trading, as part of its broad restructuring, reported Bloomberg on Friday, citing sources.
Deutsche refused to comment on the scale of prospective work reductions, saying: “The bank is working on initiatives to speed its conversion to enhance its sustainability. If and when necessary, we will update all stakeholders.”
Besides shrinking the investment bank, Mr. Sewing and executives are also set to reveal a renewed focus on transaction banking and private wealth management as the lender tries to find new and reliable revenue sources. Deutsche’s Wall Street company is anticipated to bear the brunt of work reductions, causing Federal Reserve representatives to invite managers to clarify the “bad bank” plan’s prospective effect.
Reason for such action:
In recent years, the German lender’s investment bank has counted low on earnings and made huge losses over the previous two quarters. The poor performance of its core business along with a series of fines for misconduct scandals has driven down the share price of the bank to the lowest levels in its 149-year history.
Since the fall of the merger negotiations with competitor Commerzbank, investor attitude towards the company worsened further in April. For the first time earlier this month, shares in the bank, which closed at € 6.78 on Friday, fell below € 6.
Hope the bank recovers soon and the employees’ count might be saved from getting trimmed further.
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