Deutsche Bank is cutting 18,000 jobs, exiting the stock sales and trading business, and shuffling leadership in a 'radical transformation'
- Deutsche Bank announced that as part of a "radical transformation," it's cutting 18,000 jobs by 2022.
- The bank says it's dropping its stock sales and trading unit, and creating a new "Corporate Bank" to focus on commercial and corporate clients.
- The bank also announced that Chief Regulatory Officer Sylvie Matherat and retail head Frank Strauß will be leaving the company.
- For more stories, go to Business Insider SA.
Germany's struggling Deutsche Bank says it will cut 18,000 jobs by 2022 in a sweeping restructuring it's calling a "radical transformation" aimed at restoring consistent profitability and improving returns to its shareholders, AP reported.
The Frankfurt-based bank said on the weekend it would drop its stock sales and trading unit as part of a plan to exit unpredictable investment banking activities.
It says it will also bundle €74 billion of assets into a separate unit to sell off, so freeing up money to pay for the restructuring.
The job cuts would reduce the workforce to 74,000 – which means that more than 1 in 6 workers at the bank will be out of a job in the next few years – and strip €6 billion in costs.
On Monday The Guardian reported that London employees were told to vacate offices by 11AM, after what one staffer told Reuters had been "a very quick meeting".
Teams in Asia were also told their jobs would be going.
The bank also announced that Chief Regulatory Officer Sylvie Matherat and retail head Frank Strauß will be leaving the company.
In a statement, the bank's CEO Christian Sewing said, "This is a restart for Deutsche Bank - for the long-term benefit of our clients, employees, investors and society."
"In refocusing the bank around our clients, we are returning to our roots and to what once made us one of the leading banks in the world," he continued.
Some are already questioning whether the turnaround effort comes too late – and if the bank will require a merger to stay competitive.
More hesitant restructuring efforts are giving way to what the @FT and others see as a major overhaul at @DeutscheBank. Big question that’s now on the table is whether #DB can shrink itself to heightened competitiveness and sustainable profitability without a merger of some sort. pic.twitter.com/EdJbFlpNjo— Mohamed A. El-Erian (@elerianm) July 7, 2019
An attempted merger with Commerzbank was abandoned in April after shareholders complained that the costs would be too great.
The restructure comes after years of Deutsche trying to compete with investment banks such as Goldman Sachs and JPMorgan. In addition, Deutsche has struggled financially as interest rates plummeted in Europe. The bank failed three of the Federal Reserve's stress tests in the last five years and continues to face restrictions from US regulators due to compliance failures.
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