Sewing Says Deutsche Bank Staff to Learn Their Fates by July
(Bloomberg) -- If you’re at Deutsche Bank AG and haven’t already been fired, you’re likely to find out next month if you will.
The bank will have completed the “vast majority” of front-office job cuts by the end of June, Chief Executive Officer Christian Sewing said Tuesday at a conference in New York, adding that 600 staff have already left the Corporate and Investment Bank division since the beginning of the year.
“Sewing’s announcement is tough for some but it’s the right thing to do in the current situation,” said Aleksander Montalbetti, managing partner at executive search firm Signium in Frankfurt. “The employees need and deserve clarity.”
The bank will reduce the current number of employees by over 7,000 from current levels by the end of 2019, Sewing vowed last week, providing the first concrete job cuts figure since announcing a large-scale restructuring of the CIB division in April.
The announcement has led to worries among senior executives that the uncertainty could cause top performers to leave. On Tuesday, Sewing added some further detail on what businesses would be cut, but stopped short of giving targets for individual units.
Sewing hasn’t even said how many of the 7,000 jobs to be cut will be at the investment bank rather than the newly-formed private and commercial bank. People briefed on the matter previously said that the bank aims to cut more than 1,000 job cuts annually at the retail bank.
The bank has also introduced a hiring freeze in units that are “above year-end expense target,” Sewing said in his presentation on Tuesday.
Although many analysts see Deutsche Bank’s ongoing decline in revenue as a particular problem, Sewing has zeroed in on cutting costs, saying on Tuesday that it’s “probably the most pressing issue” facing the lender, and is “what we can really influence.”
Aside from staff, Deutsche Bank is also looking to cut costs by moving offices “out of city centers” and paying less money to information technology vendors, according to Sewing’s presentation. The bank has 3.5 billion euros ($4.1 billion) in vendor costs each year and 1.2 billion euros in real estate costs, Sewing said. The bank has already said it will leave Houston, and move its main office in New York away from Wall Street to a smaller, Midtown location.
Investors have so far refused to buy into Sewing’s narrative. The share price of Germany’s biggest lender fell nearly 5 percent on Tuesday to near its all-time low, seen in September 2016, as a steady decline since the beginning of the year was compounded by a market sell-off triggered by the political crisis in Italy. It recouped some of those losses at Wednesday’s opening and was up 1.6 percent at 09.46 a.m. in Frankfurt.
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