Deutsche Bank has begun the first round of 18,000 job cuts announced at the weekend as part of radical global restructuring.
Hundreds of employees in London, New York and Tokyo learned their careers “ended in an envelope, a hug and a cab ride”, says Reuters on Monday morning.
In London, “workers started leaving the bank’s building in the City at around 10am carrying bags of belongings. Some said they were told their passes would stop working at 11am”, The Guardian reports.
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By lunchtime, says the Daily Mail, “trade was picking up at the nearby Balls Brothers pub, with many of the employees thought to be making their way to the bar from the office.”
Deutsche Bank is to cut its global workforce to 74,000 by 2022, part of a restructure that will cost the company €7.4bn ($8.3bn; £6.6bn) over the next three years.
The lender says the aim of the changes is to make the bank “leaner and stronger” but the scale of the restructuring has shocked observers.
The BBC's Simon Jack says the news does not mean we are “in the foothills of another financial crisis”, as it is a problem “specific to Deutsche Bank, which expanded rapidly in the 1990s and 2000s”.
He adds that when the financial crisis occurred, Deutsche Bank was slow to respond by cutting its business back to a more sustainable size, and “it is paying the price for that now”.
The Times says that Deutsche has “struggled in the past decade with regulatory investigations and a tough market”. Simon Lambert of This Is Money agrees, saying “the aftermath of the crisis saw much tougher rules brought in for banks, requiring them to hold more capital, rely less on debt and play things safer, leaving Deutsche struggling”.
In a letter to staff, Deutsche CEO Christian Sewing says: “First let me say this: I am very much aware that in rebuilding our bank, we are making deep cuts.
“I personally greatly regret the impact this will have on some of you. In the long-term interests of our bank, however, we have no choice other than to approach this transformation decisively.”
