Staff at Deutsche Bank’s
Tearful workers were told to pack up their belongings just hours after the major restructuring was announced by the firm, which employs 8,000 people in the UK.
In some cases, staff were told that their building passes would be deactivated by the afternoon, with some seen crying as they left the office with boxes and bags.
Other employees were pictured on the steps of the office taking in a huge delivery of about 15 pizzas at lunchtime from a motorcyclist.
A man carries a box as leaves from the offices of German bank Deutsche Bank in London today
A man leaves the Deutsche Bank building in Central London with some belongings today
Yesterday, the Frankfurt-headquartered bank said the mass layoffs would reduce its annual costs by £5.4billion.
The 91,500 employees are set to be cut by just over 20 per cent, to 74,000, in an unprecedented round of departures for Deutsche.
Employees in London were expected to find out more about their fates today, with several seen leaving the office building this morning carrying large bags.
Deutsche Bank has not said how many of the 7,000 staff in London will lose their jobs.
Sources have estimated it could be as many as 3,200, while an IT contractor at the London Wall office said 100 people had been made redundant from a single floor.
One Deutsche employee in London told the Financial Times: ‘This is really sad what is going on right now in the bank, but I guess from top management’s point of view that is what is needed to be done.’
The Telegraph’s banking editor Lucy Burton wrote on Twitter today: ‘Some Deutsche Bank staff in London told they have until 11am to pack up their stuff, just hours after the overhaul was announced.
A staff member takes in pizza boxes at the London office of Deutsche Bank at lunchtime today
A staff member receives a pizza delivery as Deutsche Bank confirmed plans to cut 18,000 jobs
”I’m trying to get my head straight,’ says one person who has been told his pass will stop working in a few hours.’
Meanwhile, an equities professional at the firm’s New York office told eFinancial News: ‘9.30am is when most people in my division have been asked to report to the auditorium to be fired.’
Deutsche has insisted it will not fire its retail employees in Germany – where employment laws are far more rigid – against their will until mid-2021.
In London, the Guardian reported how 100 people had been made redundant on the fourth floor while some members of staff were seen leaving the office in tears.
Chief executive Christian Sewing said the job cuts ‘have been the most difficult and painful part of our decision making’ as ‘people and their fates are very important to us’.
The cut backs from the bank – which paid billions in fines and settlements after the 2008 financial crash, when when Lehman Brothers failed – comes after concerns the UK economy is at a standstill.
Data firm Markit’s PMI tracks the private sector and reported shrinking business activity in June.
Chris Williamson, economist at IHS Markit, told The Financial Times: ‘The latest downturn differs from that seen in 2016 as it has followed a gradual weakening in the rate of economic growth rather than being a sudden and brief collapse in output after the ‘shock’ referendum result.’
People walk outside the London office of Deutsche Bank which has confirmed plans to cut jobs
Deutsche Bank said today that it would drop its stock sales and trading unit as part of a plan to exit more volatile investment banking activities.
It said it would cut roughly a quarter of its total cost base through steps such as dropping the investment bank’s stock-trading business.
It would also slim down its division focused on fixed-income investments.
Why is Deutsche Bank struggling?
Deutsche Bank’s expansion in investment banking dates back to 1989, when it took over Morgan Grenfell, and the 1999 takeover of Bankers Trust.
The division helped drive strong profits in the 2000s and was part of an ambition to become one of the global banking giants, like JPMorgan or HSBC.
But the expansion, and the global financial crisis around 2008, also helped generate its subsequent problems.
Deutsche Bank wrestled for years with high costs, weak profits, regulatory fines and a low share price.
The Frankfurt-based bank went three straight years without an annual profit before earning 341 million euros for 2018.
Sewing took over last year, promising faster restructuring after predecessor John Cryan was perceived to have moved too slowly.
The bank would not say where the cuts would fall, but many of its investment banking activities are carried out in Wall Street and London.
It will also slim down its division focused on fixed-income investments. By doing that, the bank is to focus on areas with steadier earnings such as serving corporate customers.
The bank would also create a separate unit to dispose of investments that are less profitable or no longer fit its strategy.
The bank said it did not expect to have to raise additional capital from shareholders.
Mr Sewing said: ‘Today we have announced the most fundamental transformation of Deutsche Bank in decades.
‘We are tackling what is necessary to unleash our true potential: our business model, costs, capital and the management team.
‘We are building on our strengths. This is a restart for Deutsche Bank – for the long-term benefit of our clients, employees, investors and society.’
The move follows the failure of merger talks with German rival Commerzbank.
Deutsche Bank said the combination would not make business sense, but that left open the question of what strategy the bank could pursue to make its business leaner and more profitable.
For years, Deutsche Bank has struggled with regulatory penalties and fines, weak profits, high costs and a falling share price.
The bank went three straight years without turning an annual profit before recording positive earnings for 2018.
A man walks into a Deutsche Bank office in London, where staff were today told to clear their desks
CEO Christian Sewing took over last year and promised faster restructuring after predecessor John Cryan was perceived to have moved too slowly to restructure the bank.
The bank paid billions in fines and settlements related to behavior before and after the global financial crisis, including a $7.2 billion settlement in 2017 with the Justice Department over selling bonds based on mortgages to people with shaky credit.
But that hasn’t ended the negative headlines. Two congressional committees have subpoenaed Deutsche Bank documents as part their investigations into President Donald Trump and his company.
Deutsche Bank was one of the few banks willing to lend to Trump after a series of corporate bankruptcies and defaults starting in the early 1990s.
Trump had sued Deutsche Bank to stop the subpoenas, but a judge in May ruled against the president.
Deutsche Bank begins wielding the axe with 18,000 staff around the world due to discover today if they have lost their job
by Chris Pleasance
Deutsche Bank sacked workers in Sydney, Hong Kong and across the Asia-Pacific region on Monday morning as it launched one of the biggest restructurings of its investment bank since the financial crash.
It announced that 18,000 jobs will go worldwide as it mothballs its global equities business and cuts back on fixed income, which was regarded as one of its strengths.
While the bank gave no geographic breakdown of where the axe will fall, staff left the Sydney office on Monday morning saying that they had been laid off.
CEO Christian Sewing said that the bank aims to turn even or break a profit by 2020, and predicts 6billion euros ($6.7billion) in pretax profits by 2022.
People walk past a Deutsche Bank office in London this morning following news of job losses
Several workers left offices holding large envelopes with the bank’s logo.
Three employees took a picture of themselves beside a large Deutsche Bank logo outside and hugged each other before hailing a taxi.
‘If you have a job for me please let me know. But do not ask questions,’ said a man who confirmed he worked at Deutsche Bank but declined to comment further.
Despite the cuts starting in Australia and Asia, the majority are expected to come from offices in Europe and the US.
The restructuring plan will cost 7.4 billion euros ($8.3 billion) and undo years of work that had aimed to make Deutsche investment bank a major force on Wall Street.
Shares in Deutsche Bank were up 4.7 per cent in Frankfurt at 6.25am GMT as investors reacted positively to the news, according to brokerage Lang & Schwarz.
Deutsche Bank gave no geographic breakdown for the job cuts, though the bulk are widely expected to fall in Europe and the United States. The global working day on Monday began with cuts in Sydney, Hong Kong and elsewhere in the Asia-Pacific.
Bankers seen leaving Deutsche Bank’s Sydney office on Monday said they had been laid off, but declined to be identified as they were due to return later to sign redundancy packages.
CEO Christian Sewing said that the bank aims to turn even or break a profit by 2020, and predicts 6billion euros ($6.7billion) in pretax profits by 2022
One person with knowledge of the bank’s Australia operations said its four-strong equity capital markets (ECM) team was also being disbanded.
Entire teams in sales and trading were losing their jobs too, according to several Deutsche bankers.
Regionally, Deutsche used to rank among the top 10 banks in league tables for ECM deals, but it had slipped in recent years, hitting 17th last year and 18th in 2019, Refinitiv data showed.
So far this year, it ranks 8th regionally for mergers and acquisitions activity.
Deutsche had some 4,700 staff at its main regional offices in Sydney, Tokyo, Hong Kong and Singapore, factsheets on its website showed.
Its investment banking team for the Asia-Pacific region had about 300 people before the cuts, of which 10 to 15 per cent will be laid off, almost all in its ECM division, said a senior Asia banker with direct knowledge of the plans.
One laid off equities trader in Hong Kong said the mood was ‘pretty gloomy’ as people were called individually to meetings.
He said that, after chats with human resources managers, ‘they give you this packet and you are out of the building.’
A Deutsche Bank spokeswoman declined to comment on specific departures, saying the bank would be communicate directly with employees and would be ‘as responsible and sensitive as possible implementing these changes.’
Chief Executive Officer Christian Sewing said on Sunday that it was the most fundamental transformation of the bank in decades. ‘This is a restart,’ he said.
‘We are creating a bank that will be more profitable, leaner, more innovative and more resilient,’ he wrote to staff.
The bank will set up a so-called bad bank to wind-down unwanted assets, with 74 billion euros of risk-weighted assets.
Sewing will represent the investment bank on the board in a shift that illustrates the division’s waning influence.
The CEO had flagged the restructuring in May, promising shareholders ‘tough cutbacks’ to the investment bank. It followed Deutsche’s failure to agree a merger with rival Commerzbank AG.
‘The new investment bank will be smaller but more resilient, with a focus on our financing, capital markets, advisory services and sales and trading businesses,’ Asia-Pacific Chief Executive Werner Steinmueller said in a memo to staff on Monday that was seen by Reuters.
One senior banker, who still had his job, said the bank was not giving up on deals it was working on but questioned how well its slimmed down franchise could compete in future.
‘The biggest question for us is where do we go from here if we don’t offer the whole suite of products. Will clients stick with us or is the game over?’ he said.