Daily Management Review

Deutsche Bank Initiates 18,000 Job Cuts Globally, Shares Rise


Deutsche Bank Initiates 18,000 Job Cuts Globally, Shares Rise
A major overhaul of Deutsche Bank was initiated on Monday with the investment bank’s planned cutting of 18000 jobs globally which is the biggest reshuffling and reorganization within the bank since the last global financial crisis.
The announcement for the cutting of the jobs was made by the lender on Sunday and the cuts a part of a 7.4 billion euros ($8.3 billion) restructuring plan that it has created for itself. Analysts believe that the restructuring would be undoing the work that the lending bank has been doing for years to become a leader at Wall Street. The restructuring plan of the bank would also include the it quitting its global equities business and cut some operations in its fixed income – which has been an area of strength for the bank.
The announcement of job cuts on Sunday saw the share of the bank being increased by more than 3 per cent in Frankfurt.
The restructuring was described as a “restart” for the bank by Deutsche Bank CEO Christian Sewing. The bank would go into loss in the current year because of the restructuring, Deutsche said. That would mean four years of losses out of five in the last five years. The company said nothing about when it would return back on the profit path.
The plans was described as “bold and for the first time not half-baked” by analysts at JPMorgan. However the analysts also said that there were some unanswered questions such as those related to the credibility of execution, revenue growth details and employee motivation.
There would be “significant challenges” for the bank to the swift implement the restructuring plan, believes ratings agency Moody's and added that its negative outlook on the German bank would be retained by it. “It's a risky manoeuvre, but if it succeeds, it has the potential to bring the bank back on course,” said a person close to one of the top 10 biggest shareholders according to the media.
No details of the geographic regions where the job cuts would be done was not provided by Deutsche Bank even though analysts expect that the majority of the job cuts would take place in the United States and European operations of the bank. On Monday, the bank initiated the job cuts in Sydney, Hong Kong and at other locations in the Asia-Pacific region.
Reuters quoted Deutsche Bank employees leaving office in Sydney on Monday as saying that they had been laid off but said nothing that can lead one to contemplate whether they would be called back again later or they had in fact signed redundancy packages with the company. Report from Australia also said that the bank had disbanded four-strong equity capital markets (ECM) teams. However the reports also confirmed that most of the members of teams associated with the mergers and acquisitions (M&A) business of the bank had not been affected.
According to reports, there were about 4700 employees of the bank in its main regional offices in Sydney, Tokyo, Hong Kong and Singapore.

Science & Technology

UK trials new breathing aid developed by Mercedes Formula One

Uber sues Los Angeles authorities over user data collection

Google Introduces New Coronavirus Website

WHO Warns That The Youth Are ‘Not Invincible' To The Novel Coronavirus

Chinese software company learns to recognize 95% of masked faces

World's largest retailer to use 5G for medical services

SpaceX Receives Approval To Create Research & Manufacturing Facility In Los Angeles

JPMorgan: Transition to e-money will be based on blockchain

Tesla In Advance Talks With CATL For Using Lithium Batteries

Financial giants and US government turn to quantum computers

World Politics

World & Politics

China opens Wuhan

Germany allocates over €1 trillion to support economy and healthcare

Peru launches $ 8.8B assistance program for companies affected by COVID-19

Tesla Supplies Free Ventilators For Immediate Patients And Not For Storing

India Turns Train Coaches Into Isolation Wards For COVID-19 Patients

Aerospace Consortium To Build Ten Thousand Ventilator In Britain

US Ambassador To UK Holds China Responsible For Global Spread Of Coronavirus

China to lift quarantine in Wuhan on April 8