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Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Deutsche Bank to Cut up to 20,000 Jobs Amid Massive Overhaul

The Board of Directors of German bank Deutsche Bank will meet on Sunday to talk about a restructuring that could lead to 20,000 job cuts, Reuters reports, citing four people familiar with the matter. Besides trimming jobs, the multinational bank might reduce its management board.

Deutsche Bank Wants to Revive After Failed Deal With Commerzbank

Deutsche Bank was negotiating a merger with Commerzbank, another major German bank. However, the deal failed, and Deutsche Bank CEO Christian Sewing pledged a major restructuring.

The management board will also be affected. The investment bank division will be represented by Sewing himself instead of having a seat on the Board’s table. Garth Ritchie, who has run the division for years, might leave the position. Stefan Hoops and Mark Fedorcik are going to lead the investment bank as co-heads, according to two sources.

Nevertheless, one of the people said that the plans aren’t cast in stone yet. Deutsche Bank didn’t want to comment on the internal restructuring. Hoops, Fedorcik, and Ritchie declined to explain the situation.

In the recent years, Deutsche Bank has been affected by several huge fines and rating downgrades, with the investment banking unit taking the blame in most of the cases, even though it brings in about 50% of Deutsche’s revenue. Despite everything, the bank is still regarded as one of the most important banks in the world.

The company said earlier that it was trying to speed up its transformation in an effort to boost its sustainable profitability.

Departing From Investment Banking

Deutsche Bank has relied on its investment banking division for many years, being able to generate consistent profits, especially before the 2008 crisis. However, during the last few years, the bank hasn’t been as profitable as some of its counterparts in the US, such as Goldman Sachs or JPMorgan. Thus, Deutsche is under pressure to refocus on its mainstream markets and manage the investment banking units as a secondary business.

Shareholders hope that the upcoming restructuring would turn around the bank’s profitability after the stock price touched the record low at the beginning of June.

Last week, the Wall Street Journal was the first to report that the bank was targeting up to 20,000 job cuts.

Deutsche Bank had 91,463 workers according to data from the first quarter. The company openly admitted that it intended to cut the number of jobs to well below 90,000.

Besides cutting jobs, Deutsche Bank will develop a bad bank, which is a structure that isolates high risk and illiquid assets. The company will use the structure to hold tens of billions of euro in assets, along with shrinking equity. Deutsche wants to get rid of up to 25% of its riskiest assets in the coming years.

Meet The Author
Anatol Antonovici
Anatol Antonovici
Senior Reporter

Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets.

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