Deutsche Bank to cut bonuses and jobs to come back stronger

Deutsche Bank has warned its employees of more job cuts to come. In addition to announcing radically reduced 2016 bonus payments for top managers, the bank told some staff on Wednesday that layoffs will continue, according to a person with knowledge of the discussions as Bloomberg reported.

In a note to staff on Wednesday, John Cryan, chief executive, said Deutsche’s management board had decided to waive their bonuses for 2016, the second consecutive year in which top executives at Germany’s biggest bank have forgone such awards after it finalised its $7.2 billion legal settlement with the U.S. Department of Justice related to the sale of mortgage bonds into the peak of the global financial crisis.

“Now that we have a clearer idea of the financial impact of the settlement with the US department of justice and our performance for the year, we feel that tough measures are unavoidable,” the bank said in the memo announcing the bonus cuts. “This is especially true at a time when thousands of jobs are being cut and our shareholders are not receiving an annual dividend.”
 

"We have taken this tough decision because it is the right thing to do," he said, adding the bank planned to return to its normal compensation programs for the year 2017. “Other companies have taken similar steps in the past and have come back stronger than before,” Frankfurt-based Deutsche Bank said in the memo. “We are convinced that we will, too.”

A spokesman for the bank declined to comment on specific job reductions.

The bank’s current business plan includes eliminating about 9,000 jobs globally from 2015 through 2018, a 9% reduction across the firm.