Deutsche Bank slashes 18,000 jobs in restructuring plan

Whole teams in Deutsche Bank's Asian operations were told yesterday that their positions were gone, as the lender began axing 18,000 jobs globally in one of the biggest overhauls to an investment bank since the aftermath of the financial crisis.

The German bank launched the restructuring on Sunday in Europe, outlining a plan that will ultimately cost €7.4 billion (S$11.3 billion) and see it scale back its investment bank - a major retreat after years of working to compete as a major force on Wall Street. The bank has almost 91,500 staff around the world.

As part of the overhaul, the bank will scrap its global equities business and also cut some of its fixed-income operations - an area traditionally regarded as one of its strengths.

Deutsche Bank gave no geographic breakdown for the job cuts, but Asia is widely reported to be less affected than Europe and the US.

Bankers in Sydney seen leaving the lender's offices on Monday confirmed they worked for Deutsche Bank and were being laid off, but declined to give their names as they were due to return later to sign redundancy packages.

One person with knowledge of the bank's operations in Australia said its four-strong equity capital markets (ECM) team was being let go, but that most of its mergers and acquisitions (M&A) team would not be immediately affected.

In Asia, the equities-group cuts include almost all research analysts based in the region and most of the sales and trading team, according to several Deutsche bankers.

Factsheets on its website showed that Deutsche had some 4,700 employees in Sydney, Tokyo, Hong Kong and Singapore.

Its investment banking team for the Asia-Pacific region numbered about 300 people before the cuts, and 10 per cent to 15 per cent will be laid off - almost all in its equity capital markets division, according to a senior Asia banker with direct knowledge of the plans.

“There is hardly any work getting done today and folks are just mailing or calling friends or headhunters. Half of the floor is gone and others are just waiting to be called in. Some people are saying their byes even before being called in,” said an equities trader in Hong Kong who has spent two years at the bank.

One Hong Kong-based equities trader who had been laid off said the mood was "pretty gloomy" as people were called individually to meetings. "(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building," the trader said.

“We are still what we were on Friday but with a much, much smaller equities capability,” said one senior Sydney-based bank executive, who kept his job.

“The news is obviously depressing but at least there’s some clarity on the businesses we are still going to focus on. My access card is working fine. So I am safe for now. What happens tomorrow, who knows but for now, I hope this is it,” said a banker in Singapore as he tapped his card to gain access to the lift.

“Our ECM business has to be scaled back but it’s not like everything will happen in one day. This is not like what StanChart did to its equities business. We are not going to be giving up our live deals. But the biggest question for us is where do we go from here if we don’t offer the whole suite of products? Will clients stick with us or is the game over?” said a Singapore banker who remains in his job.

RESTART

Chief Executive Officer Christian Sewing, who now aims to focus on the bank's more stable revenue streams, said on Sunday that it was the most fundamental transformation of the bank in decades. "This is a restart," he said.

"We are creating a bank that will be more profitable, leaner, more innovative and more resilient," he wrote to staff.

The bank will set up a so-called bad bank to wind-down unwanted assets, with a value of 74 billion euros of risk-weighted assets.

"The strength of our service offering and our wide network covering 14 markets in Asia Pacific is a competitive advantage for Deutsche Bank globally, and we remain absolutely committed to this region," said the bank's Asia Pacific Chief Executive Officer Werner Steinmueller in a memo to Asia-Pacific staff. “Though the investment-banking unit would be smaller, it would be “more resilient,” he said.

A Deutsche Bank spokeswoman declined to comment on specific departures, saying the bank would be communicating directly with employees.

"We understand these changes affect people's lives profoundly and we will do whatever we can to be as responsible and sensitive as possible implementing these changes," she said.