Germany’s Deutsche Bank to lay off more than 7,000 workers
Germany’s biggest lender, Deutsche Bank, has announced that it will slash over 7,000 jobs as it looks to cut costs and recover from three consecutive years of losses.
The German financial giant said in a statement on Thursday that full-time staff positions will be reduced from 97,000 to “well below” 90,000 so that costs do not exceed 23 billion euros ($27bn) in 2018.
“We are Europe’s alternative in the international financing and capital markets business. However, we must concentrate on what we truly do well,” said Christian Sewing, the newly appointed CEO of Deutsche Bank, in a statement.
The cost-cutting measures come amid a number of leadership changes at the bank in the last six years.
“The situation at Deutsche Bank has been a cause for concern for investors and shareholders for some time,” said Al Jazeera’s Paul Brennan, reporting from the capital, Berlin.
“Since 2012, Deutsche Bank has had four different chief executives in charge and the strategy has frankly been confused and muddled,” he added.
As part of its new strategy, the bank is aiming to scale back its corporate and investment sector by more than 100 billion euros ($117bn), with the majority of the reduction expected to be achieved by the end of the year.
Deutsche Bank said it is targeting a further reduction in its costs to 22 billion euros ($26bn) next year.
Michael Hewson, chief market analyst at CMC Markets, questioned the bank’s restructuring strategy, saying it has come “very, very late”.
“In focusing on its domestic market, Deutsche Bank is making a significant mistake because it’s a very low-margin business banking in Germany; you have negative rates and an economic cycle that is starting to look increasingly mature,” he told Al Jazeera in an interview from London.
“It’s going to be very, very difficult for Deutsche Bank to navigate their way out of this effectively,” Hewson added.
There are more than 44 million people employed in Germany, with a 1.4 percent increase in the employment rate reported in the past month.
The country has experienced strong economic growth since mid-2016.
“It would appear that Deutsche Bank does buck the trend of that, but of course, investment banking is not really an indicator of the overall strength of a manufacturing economy such as Germany’s,” said Al Jazeera’s Brennan.