(Bloomberg) -- Deutsche Bank AG is planning to cut more than 10 percent of U.S. jobs as it withdraws from businesses where it can’t compete, a person briefed on the matter said.
It’s the first concrete indication of how far Germany’s largest lender is planning to retreat from its past ambition to be a global investment bank, a goal it has pursued for some 20 years. The U.S. counts about 10,300 employees, or about a tenth of the firm’s global workforce.
The bank dismissed 400 U.S.-based staff this week, the person said, asking not to be identified as the details aren’t public. These appear to be initial long-planned cuts first reported by Bloomberg in February. They’ll now accelerate, eventually totaling more than 1,000 U.S. employees, the person said.
Deutsche Bank Chief Executive Officer Christian Sewing on Thursday said the firm will restructure the investment bank, including the scaling back of operations in the U.S. The bank’s management said they expected the bulk of the cuts to be completed in 2018 and that they would fall across the front, middle and back offices of the corporate and investment bank. In Asia, meanwhile, the bank will cut back on purely local business.
Sewing stopped short of saying how many jobs would go, while Chief Financial Officer James von Moltke also gave few clues as to how much of its 1.4 trillion euro ($1.7 trillion) balance sheet would be shed in the process. Von Moltke estimated restructuring costs for 2018 would rise to 800 million euros, up from an earlier estimate of 500 million euros.
“These cutbacks will be painful, but they are unfortunately unavoidable if we want to be sustainably profitable in the best interests of our bank, our clients and our investors,” Sewing said in a statement.
The bank plans to reduce its activities in U.S. rates sales and trading and corporate finance. Areas where the investment bank still believes it can grow globally include foreign exchange, commercial real estate and structured equity financing, Garth Ritchie, head of the investment bank, said in a memo to clients obtained by Bloomberg.
The publication Global Capital first reported that Deutsche Bank plans to cut its U.S. workforce by about 10 percent.
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