Within hours of announcing a major restructuring, thousands of employees of Deutsche Bank have been laid off. With an envelope in hand, Reuters says that many its staff across the world left their desks for the last time on Monday.
Earlier this week, Deutsche announced that it will cut 18,000 jobs globally out of its total 74,000 employees by 2022. This move comes as the bank aims to reduce adjusted costs by a quarter to $19 billion over the next few years.
The bank closed a major part of its trading businesses which first affected employees in Sydney and Hong Kong. These job cuts are happening across offices from Hong Kong to London, New York and even Bengaluru.
Chief Executive Christian Sewing declined to give a regional breakdown of the planned cuts but said they wouldn't be concentrated on one region. Sewing said the investment bank would come out of the restructuring smaller but more stable.
According to a Reuters report, Deutsche Bank plans to close all of its equity trading business and has cut some parts of its fixed income operations as well. While some are losing their jobs immediately, some staff will be kept for longer to help wind down operations. However, investors reportedly weren’t impressed with the bank’s overhaul plans with its shares falling 5.4% in Frankfurt on Monday.
Reuters quoted employees as saying that they anticipated that their jobs were going to get cut, but equities market wasn’t doing great either leaving them with little options of finding another job.
A Deutsche Bank employee in Bengaluru told Reuters that he and his colleagues were told that their jobs have become redundant and handed over their letters and given approximately a month’s salary. This has come as a huge shock to several given the tough market situation, with sacked employees worried about pending financial burdens such as loans.
Experts say that finding a new job in the equities market will be very tough because trading revenues are falling, which could lead to several brokers not hiring new employees.
Deutsche Bank said on Sunday that it expected to post a net loss of 2.8 billion euros ($3.14 billion) as a result of restructuring-related costs when it reports second-quarter results on July 24.
The bank needs to focus on the business areas where it is most competitive, Sewing said. In the past, "we simply spread ourselves too thin".
The lender, whose share price has been near a record low for months, will focus on serving European companies and retail-banking customers, including wealthy clients.
It is aiming to strengthen businesses like asset management, currency trading, corporate-cash management and trade finance that support its narrower focus.
The bank also said on Sunday it would exit its global-equities sales-and-trading business completely but will continue offering some services, such as share underwriting, to clients.
(With IANS inputs)