Deutsche Bank starts slashing jobs - what went wrong?
Analysts say lender struggled to adjust to aftermath of financial crash
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.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
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.”
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Why Bhutan hopes tourists will put a smile back on its face
Under The Radar The 'kingdom of happiness' is facing economic problems and unprecedented emigration
By Chas Newkey-Burden, The Week UK Published
-
7 beautiful towns to visit in Switzerland during the holidays
The Week Recommends Find bliss in these charming Swiss locales that blend the traditional with the modern
By Catherine Garcia, The Week US Published
-
The Week contest: Werewolf bill
Puzzles and Quizzes
By The Week US Published
-
Labour shortages: the ‘most urgent problem’ facing the UK economy right now
Speed Read Britain is currently in the grip of an ‘employment crisis’
By The Week Staff Published
-
Will the energy war hurt Europe more than Russia?
Speed Read European Commission proposes a total ban on Russian oil
By The Week Staff Published
-
Will Elon Musk manage to take over Twitter?
Speed Read The world’s richest man has launched a hostile takeover bid worth $43bn
By The Week Staff Last updated
-
Shoppers urged not to buy into dodgy Black Friday deals
Speed Read Consumer watchdog says better prices can be had on most of the so-called bargain offers
By The Week Staff Published
-
Ryanair: readying for departure from London
Speed Read Plans to delist Ryanair from the London Stock Exchange could spell ‘another blow’ to the ‘dwindling’ London market
By The Week Staff Published
-
Out of fashion: Asos ‘curse’ has struck again
Speed Read Share price tumbles following the departure of CEO Nick Beighton
By The Week Staff Published
-
Universal Music’s blockbuster listing: don’t stop me now…
Speed Read Investors are betting heavily that the ‘boom in music streaming’, which has transformed Universal’s fortunes, ‘still has a long way to go’
By The Week Staff Published
-
EasyJet/Wizz: battle for air supremacy
Speed Read ‘Wizz’s cheeky takeover bid will have come as a blow to the corporate ego’
By The Week Staff Published