Deutsche Bank to Cut 7,000 Jobs
Posted May 24, 2018 8:39 a.m. EDT
LONDON — Deutsche Bank, Germany’s biggest lender, said Thursday that it would cut 7,000 jobs and “significantly reshape” its sales and trading business, the latest sign of the bank’s curtailed ambitions as it seeks to move past a series of crises.
The job losses — equivalent to 7 percent of its workforce — come a month after Christian Sewing took over as chief executive, the fourth person in four years to hold the title or that of co-chief executive at the bank.
Sewing has already said the bank will focus on Europe and shrink its operations in the United States and Asia, effectively giving up on years of efforts to join the likes of Goldman Sachs and JP Morgan Chase as a Wall Street titan.
“We remain committed to our corporate and investment bank and our international presence — we are unwavering in that,” Sewing said Thursday in a statement. But, he added, “we must concentrate on what we truly do well.”
Deutsche Bank said the job cuts would reduce the total number of its employees to about 90,000. It added that it would also seek to reduce its leverage exposure in its corporate and investment bank by 100 billion euros, or $117 billion, a cut of about 10 percent.
The announcement came just hours before the bank’s annual general meeting, during which its chairman, Paul Achleitner, is expected to come under pressure.
Achleitner, who has led Deutsche Bank’s supervisory board since 2012, has been the target of increasing criticism for the lender’s missteps. The agenda at the meeting Thursday includes a motion to oust him, although he is expected to keep his job, because his removal would throw the bank into even greater turmoil.
The selection of Sewing had been intended to draw a line over Deutsche Bank’s various struggles — the lender had a hand in almost all of the major crises and scandals tied to the 2008 global financial crisis. It has paid billions of dollars in penalties and settlements over the fraudulent sale of mortgage-backed securities, as well as over its role in the manipulation of benchmarks used to determine the interest rates on numerous financial products.
Deutsche Bank has also come under pressure more recently. The European Central Bank, for instance, has asked it to calculate the costs of winding down its holdings in derivatives. The exercise is a hypothetical one, but it points to concerns over risks hidden in Deutsche Bank’s balance sheets.
The bank’s stock price was little changed Thursday, at 10.93 euros a share. But it has fallen nearly a third since the start of the year.