As part of an effort to promote a “powerful turnaround,” Deutsche Bank plans to cut 35,000 jobs from its payroll and close operations in 10 countries.
The payroll pruning at the biggest lender in Europe’s most powerful economy includes 9,000 full-time jobs — 4,000 of those in Germany alone — plus 6,000 external contractors. Deutsche Bank is also planning to sell businesses employing 20,000 people, primarily the Postbank retail bank in Germany, over the next two years.
The bank’s new co-CEO, John Cryan, presented details of the restructuring as the company reported a steep third-quarter net loss of $6.5 billion that reflected in part writedowns of key investment-banking and other assets. Its current full-time headcount is around 100,000, not including contractors.
By 2018, “we expect to see the benefits of our hard work and potentially be in the midst of a powerful turnaround,” Cryan said.
As The Wall Street Journal reports, Deutsche Bank and other European lenders are “facing headwinds on several fronts, as profitability is hit by tougher regulations and capital requirements, volatile market conditions, and stiffer competition from global rivals, particularly U.S. banks.”
The bank has also said that to conserve capital, it doesn’t plan to pay shareholders a dividend this year or next. It expects to realize cost savings of 3.8 billion euros ($4.15 billion) from the changes.
“Two years of dividend cuts, very aggressive cost-cutting … There’s more wrong with this business than many people thought,” Chris Wheeler, an analyst with Atlantic Equities, told the WSJ.
Deutsche Bank will close operations in Malta, Argentina, Chile, Mexico, Finland, Peru, Uruguay, Denmark, Norway, and New Zealand.