Deutsche Bank AG is considering cutting as many as 8,000 jobs in addition to selling a consumer banking unit, which would shrink its total workforce by almost 25 percent, according to a person familiar with the matter.
The new cuts would probably mostly affect administrative and technology jobs, although some client-facing positions might be eliminated, said the person, who asked to remain anonymous, because the plans are confidential.
A plan to divest Bonn-based Deutsche Postbank AG, which employs about 15,000, is still part of the strategy, the person said.
Photo: Reuters
A final decision is to be made next month, the person said.
Deutsche Bank, which runs Europe’s biggest investment bank, employed 98,647 people at the end of June.
Klaus Winker, a company spokesman, declined to comment on Monday.
Co-chief executive officer John Cryan, 54, who replaced Anshu Jain in July, is pressing ahead with the bank’s plan to bolster profitability by reducing expenses and cutting back businesses.
On his first day in the job, he pledged to sell the Postbank unit, as outlined in April, and tackle the company’s “swollen” cost base and “antiquated and inadequate” technology.
“Given nothing has really happened to Deutsche Bank’s staff levels on a net basis, Cryan will have to make some deeper cuts to show he is serious about actually cutting expenses,” Nomura Holdings Inc analyst Jon Peace said. “A decrease in the order of 10 percent of staff after the sale of Postbank would finally add credibility.”
Deutsche Bank’s staff levels at the end of June were up 0.4 percent from the end of 2013, according to the company’s filings.
Cryan aims to complete working out the details of the bank’s plans by the end of next month. When taking over as co-chief executive with Juergen Fitschen, he inherited a strategy to boost returns by lowering expenses by about 15 percent by 2020 and shrinking assets at the investment bank by as much as 17 percent through 2018.
While that plan foresaw the bank closing as many as 200 consumer banking branches and exiting up to 10 countries, the company stopped short of saying how many jobs would be lost and where.
Deutsche Bank is to probably close most or all of its investment bank’s operations in Russia, the person said.
The lender, which operates one of the largest foreign securities firms in Russia, with more than 1,000 employees, is considering cutting about 100 jobs in the country after the economic slump undermined deal-making, people with knowledge of the plan said in June.
The lender is also embroiled in an alleged money-laundering probe in Russia, which involves about US$6 billion of transactions, according to people familiar with the matter.
Russia, in its first recession since 2009, has seen investment banking fees plummet as deal-making has ground to a halt. Commissions are at the lowest since 2002, according to data compiled by New York-based Freeman & Co.
Deutsche Bank has said it plans to divest Postbank by the end of next year via a trade sale or by issuing shares to the public.
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