Deutsche Bank (NYSE:DB) has continued announcing radical structural changes to its business, this time cutting its global workforce by thousands of jobs whilst exiting ten countries by 2020.
The unwelcome news follows an earlier announcement this month that Deutsche Bank , undergoing a schism and completely changing its leadership structure in the process. The company’s Corporate Banking and Securities (CB&S) division was amongst the most affected by the changes.
More specifically, Deutsche Bank has portended that its shifting operations would see a reduction of its global workforce by 9,000 full-time jobs by 2020. This is on top of the approximately 6,000 external contractor positions that are also slated to go.
However, Deutsche Bank is saving its most aggressive plans for the next two years. It revealed its intention to shed assets in excess of $4.4 billion along with a staggering 20,000 jobs over this period. Logistically, these job cuts will see a full exit from no less than ten countries, including Argentina, Chile, Mexico, Uruguay, Peru, Denmark, Finland, Norway, Malta, and New Zealand.
Deutsche Bank executive John Cryan defended the recent moves by reiterating that the initiative is commensurate with the lender’s plan to halve the amount of clients it has in its global markets and investment banking business – Germany will continue to be the bank’s paramount market.
The news could not be more unwelcome for investors who are already grappling with sour Q3 earnings at Deutsche Bank. According to Mr. Cryan in a recent statement on Deutsche Bank’s downtrodden earnings: “In the third quarter 2015 we reported a record net loss – a highly disappointing result that was largely driven by items we had already flagged earlier in October.”
Already in the spotlight, Deutsche Bank’s job slashing comes just one week after an . The German lender revealed that back in June, a junior member of Deutsche Bank’s FX sales team mistakenly processed a trade to a hedge fund client that utilized a gross figure rather than a net value – what this amounted to was a number far in excess of its original value, culminating in a trade of $6.0 billion. Deutsche Bank has since clarified that the trader’s superior was on vacation at the time and thus unavailable.
Deutsche Bank’s (NYSE:DB) investors have little reason to be cheery heading into Q4 after the bank has also decided to cut its dividend for the next two years in an attempt to jumpstart its balance sheet and meet new fiscal targets – the result is a zero-dividend payout plan.
At the time of writing, Deutsche Bank’s (NYSE:DB) share prices are firmly entrenched in negative territory ahead of the US open following the news. Shares are currently settled at $28.29, having tanked -6.63% in after hours trading Wednesday.
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