Germany’s largest bank, Deutsche Bank, announced on Thursday that it wants to cut more than 7,000 jobs worldwide and significantly reduce its activity in capital markets in an attempt to get out of trouble.
The workforce will be reduced “well below 90,000”, against 97,130 in full-time equivalent at the end of March, said Deutsche Bank in a statement issued during a general meeting of shareholders in Frankfurt.
“The reduction in the number of employees is under way,” the group adds. According to the German media, it could ultimately involve some 10,000 people.
These staff reductions, which affect nearly one in ten employees, will spread over all regions of the world and activities, with the brunt of the redundancies falling in the investment banking sector.
The announcement marks a major change in direction for the German banking group: giving up trying to compete with the American Wall Street giants in this sector and refocus on European retail banking.
This new strategy is driven by the arrival of the new German CEO in April, Christian Sewing – following the forced departure of his British predecessor John Cryan.
“We continue to support our investment bank and remain international (…) but we need to focus on what we are doing really well,” he said. “We are the European alternative in the field of international financing and capital markets,” he added.
The bank expects to have to spend 800 million euros in restructuring costs, including severance payments for many investment bankers.
By refocusing on Europe, Deutsche Bank plans to reduce costs to “less than 23 billion euros this year”, then to increase to 22 billion euros in 2019, without enforcing large parts cuts to its activities.