Wed, Jul 10, 2019 - Page 10 News List

Bank leaves thousands chasing jobs

HARD TIMES:Some of the employees laid off by Deutsche Bank will have to settle for smaller wages, as more than 1,100 investment bankers last year made US$1.25m each


Deutsche Bank AG’s massive reorganization is to put thousands of finance employees out of work, and with firms throughout the industry running lean, they would not all find jobs easily.

The German lender’s sweeping turnaround plan, including an exit from the equities sales and trading business, is to slash Deutsche Bank’s workforce by about 18,000 employees globally.

Workers from Sydney to London to New York on Monday received the details of their exit packages — and were left pondering their next move.

“There will be roles for these folks, but it won’t be for everyone, unfortunately,” said Noah Schwarz, a senior client partner at executive-search firm Korn Ferry, who predicted that US, Canadian and Japanese banks are among the places former Deutsche Bank employees might end up.

“Some of these bankers will have to reinvent themselves,” he said.

Hundreds of thousands of jobs have disappeared from the global finance industry since the 2008 crisis, and some of the biggest banks have not stopped cutting.

Automation and new technology have been replacing workers, while reduced risk-taking has trimmed demand in areas such as structured finance.

Front-office headcount for investment banking and trading fell for a fifth year last year, according to Coalition Development Ltd data.

Hedge funds, which used to poach employees from Deutsche Bank’s equities business, have cut back in the past few years.

That does not mean there are not opportunities for those shown the door at Deutsche Bank.

Some traders might end up at family offices — investment vehicles for ultra-wealthy people that have been taking employees from Wall Street firms, Schwarz said.

Investment bankers might be helped by hiring at boutique firms such as Evercore Inc.

Goldman Sachs Group Inc has been more aggressive in looking beyond its walls for senior-level hires in the past year, while JPMorgan Chase & Co and BNP Paribas SA have almost reversed all their post-crisis job cuts.

“Goldman has openly been recruiting,” said Schwarz, who once worked at the firm. “That’s been a fundamental change. It tells you that this is a fluid jobs market, and there will be more movement in the months and probably the year or two to come.”

That movement has already been happening, with some Deutsche Bank executives leaving before it announced its restructuring on Sunday.

Those who have departed in the past few months include Mark Hantho, a top equities capital markets banker, and private equity dealmaker John Eydenberg.

They are both going to Citigroup Inc.

Many leaving Deutsche Bank would find it harder to locate their next position. Thousands of the cuts are in the equities trading business Deutsche Bank is eliminating — and that is an area hit particularly hard by automation.

For example, Goldman’s chief executive officer last year said that his firm’s stock-trading unit had three people doing the job once done by 500.

“A lot of the people coming out of DB are going to be very challenged to find jobs just because of the sheer change in the equity business,” said Michael Nelson, a senior recruiter at Quest Group. “When you are dispersing that many people globally, some of those people might have to leave the business.”

For those who are able to land a job, a smaller paycheck might be in the offing. Deutsche Bank had more than 1,100 material risk takers in its investment bank who earned US$1.25 million on average last year, with almost 60 percent of that coming in salary, according to the company’s annual compensation report.

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