Published: Mon, July 08, 2019
Money | By Ethel Goodwin

Deutsche Bank to Slash 18000 Jobs in Reshuffle

Deutsche Bank to Slash 18000 Jobs in Reshuffle

By 2022, the Bank intends to reduce its workforce to 74,000 employees, and the restructuring operation is expected to cost approximately $8.3 billion over three years.

The financial district with the headquarters of Germany's largest business bank, Deutsche Bank, is photographed on early evening in Frankfurt, Germany, January 29, 2019.

The plan represents a major retreat from investment banking by Deutsche Bank, which for years had tried to compete as a major force on Wall Street.

The Frankfurt-headquartered bank said it would cut roughly a quarter of its total annual costs, from 22.8 billion euros ($25.6 billion) previous year to 17 billion euros, through steps such as dropping the investment bank's stock-trading business.

The bank will create a new Capital Release Unit to manage the efficient wind-down of the assets related to business activities, which are being exited or reduced.

Deutsche Bank has suffered multiple blows to its reputation over the past year, having failed USA bank stress tests, suffered downgrades to its investment grade ratings and had its offices raided by German police in November as part of a money laundering investigation linked to the Panama Papers revelations.

Last week, the head of Deutsche's investment bank Garth Ritchie agreed to step down, marking a sign of the division's waning influence.

In May, CEO Christian Sewing told shareholders he was ready to make "tough cuts" to improve the struggling bank's profitability and to raise a "disappointing" share price. The pledge came after Deutsche failed to agree a merger with rival Commerzbank CBKG.DE .

Michael Huenseler, head of credit portfolio management at Assenagon Asset Management, said a lot had to go right for the plan to be successful.

The moves will cost €7.4B, and the bank is aiming to cut total costs by 25% by 2022.

In 2018, Deutsche cut 6,000 jobs, The Guardian says.

Media reports had suggested that Deutsche Bank could cut as many as 20,000 jobs - more than one in five of its 91,500 employees.

Deutsche bank gave no geographic breakdown for the job cuts.

The Frankfurt-based lender expects to stop offering trading of cash equities, equities research and may no longer underwrite initial public offerings in the region, the person said, asking not to be identified as the matter is private.

In asset management, Deutsche Bank's DWS arm is seen as another of its strong points, and one the bank leaned on to extract value a year ago when it listed 22.5% of the business. The supervisory board of the bank meets on Sunday to decide about further strategies.

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