Layoffs started at Deutsche Bank



Chief Executive Officer Christian Sewing confirmed during a conference call that the layoffs began Monday in Asia. He added that Deutsche Bank teams in other parts of the world would also be affected.

"I am very conscious of the fact that during the reconstruction of our bank, we are making deep cuts," the CEO said in a letter to employees. "Personally, I very much regret the impact it will have on some of you."

Deutsche Bank did not give details of the offices that would suffer the consequences of the downsizing. The bank announced that its workforce would be reduced to about 74,000 people by 2022.

In addition to Asia, it has large offices in London and New York as well as branches and outposts around the world.

"We will only operate where we are competitive," Couture said on Monday. "We tried to compete in almost every corner of the banking market at the same time, and we were too scattered."

    Christian Sewing, CEO of Deutsche Bank, announced a radical overhaul.
German Bank (DB) As part of the redesign, its investment bank will shrink, close its sales and trading activities and create a "bank of poor quality" representing assets of 74 billion euros ($ 83 billion) .

This is a radical change for a bank in operation for nearly 150 years. But urgent measures were imposed after recent attempts at restructuring failed to produce steady profits.

Wall Street Retreat

The biggest German bank dreamed at one time of dominating the investment banks and competing with the American heavyweights Goldman Sachs (GS) and Morgan Stanley (MRS).

These ambitions came to fruition in 1999 with the purchase of the US investment bank Bankers Trust.

But the bank – and its investment bank team in particular – has struggled to find a direction as a result of the global financial crisis. The bank published an annual profit last year for the first time since 2014.

The weakness of the European economy and the reluctance to reform have made it more difficult for Deutsche Bank to compete in the expensive sector.

Deutsche Bank may have taken the first step in radical restructuring

The investment bank continued to absorb resources even though it remained far behind its competitors. The resignation of division chief Garth Ritchie last week indicated that major changes were coming.

The change announced Sunday will allow Deutsche Bank to take a step back from the investment bank and give priority to more reliable business sectors, such as the management of corporate money. .

But the restructuring effort will not be cheap.

The bank said the costs related to the redesign of the system would result in a net loss of 2.8 billion euros ($ 3.1 billion) for the second quarter. The total cost of the restructuring will reach 7.4 billion euros ($ 8.3 billion) by 2022.


Source link