Germany’s largest lender Deutsche Bank said on Thursday it will cut over 7,000 jobs and dramatically scale back its investment banking activities as it tries to turn the corner on years of losses.
“The number of full-time equivalent positions is expected to fall from just over 97,000 currently to well below 90,000. The associated personnel reductions are underway,” a statement said.
A quarter of the jobs in its equities and sales trading business would be hit by the cuts, the bank said.
The jobs cull is the first big decision to be announced under new chief executive Christian Sewing, who unexpectedly replaced CEO John Cryan in early April.
The Wall Street Journal on Wednesday reported that Deutsche Bank was planning to eliminate around 10,000 full-time positions, or roughly 1 in 10 jobs at the bank.
Deutsche Bank said it expects its 2018 results to be hit by restructuring charges of up to €800m ($935.9m). For 2019, the bank plans to cut adjusted costs to €22bn, it said.
The cuts follow months of thorny debate over how fast and deep job losses should be at the beleaguered bank. The process has divided senior executives and left investors unconvinced, with the bank’s shares falling by nearly a third this year to their lowest level since a crisis of confidence hit the lender in late 2016.
Deutsche’s largest investment banking operation is based in the City of London. It employs about 8,500 people in the UK – mostly in London, with smaller operations in Birmingham and Bournemouth – and is one of the largest employers in the City.
The news came a few hours before the group’s annual shareholder meeting in Frankfurt, that started at 9am London time, where the group is expected to face a protest from shareholders over its poor performance.
When Sewing, the former co-head of the bank’s retail banking arm, was appointed to replace his British predecessor, John Cryan, in April, he vowed to take “tough decisions” to return the bank to profitability.
Sewing had already signalled he was planning a drastic shake-up of the bank’s cherished but trouble-plagued corporate and investment banking units in a bid to convince investors Deutsche is serious about returning to profitability.