Deutsche Bank quietly moved 2,000 jobs from Wall Street to Florida before mass worldwide layoffs

Before announcing a stunning round of global layoffs that sent share prices tumbling on Monday, German investment firm Deutsche Bank quietly moved more than 2,000 jobs from New York City to Jacksonville, Florida, it has been revealed.

After uprooting nearly 1,000 miles from Wall Street and the center of the financial universe, thousands of the bank’s staff in Jacksonville are terrified that they are next on the chopping block as 18,000 get the pink slip worldwide.

The Florida staff were lured south with the promise of a dramatically lower cost of living, meaning that even with a steep pay cut they could afford beachfront homes and the toniest private schools. 

The only catch is that the move may have been a one-way ticket – now settled far from any competitors, Deutsche Bank employees in Jacksonville will struggle that much harder to find work if layoffs hit the branch.

Deutsche Bank’s Jacksonville office is seen in a file photo. Some 2,250 employees work there, many lured from Wall Street by the promise of a lower cost of living

Though it’s unclear how much Deutsche Bank slashed salaries for those who moved, the average financial analyst in Jacksonville makes $68,400 a year, compared to $110,300 in New York City, according to JaxUSA. 

However, the median home value in Jacksonville is $176,800, compared to $676,000 for all of New York City, including the outer boroughs, according to data from Zillow.

It’s choice that many in the financial industry have faced in recent years, as Wall Street banks have shipped thousands of jobs to distant locales such as Salt Lake City, Tennessee, and Texas. 

As of Tuesday morning, the state of Florida had yet to post any layoff notice regarding Deutsche Bank’s office there, as required by state law. 

A spokesman for the bank did not immediately respond to an inquiry from DailyMail.com about any layoffs in Jacksonville.

But in its massive restructuring announced Monday, Deutsche Bank said it plans to close all of its equity trading business and cut some parts of its fixed income operations, in an overhaul expected to lead to 18,000 job cuts – one fifth of its 91,000-person workforce. 

The cuts spanned the globe, from the bank’s offices in Sydney and Hong Kong to London and New York. 

In the Florida operations center, the soon-to-be-axed equity trading and sales divisions account for at least some of the staff, according to the Jacksonville Daily Record. 

The local chamber of commerce’s list of the top employers says Deutsche Bank has 2,250 area employees in Jacksonville.  

At the bank’s Wall Street office on Monday, crestfallen employees were seen departing the building with large white envelopes containing their separation paperwork.

People exit Deutsche Bank's Manhattan headquarters on Monday with some of their belongings following news that the global banking giant will be axing 18,000 employees

People exit Deutsche Bank’s Manhattan headquarters on Monday with some of their belongings following news that the global banking giant will be axing 18,000 employees

A man holding an envelope walks out of Deutsche Bank in New York on Monday

A man holding an envelope walks out of Deutsche Bank in New York on Monday

New York staff impacted by the cuts were summoned to the cafeteria to learn of their fate. A notice inside the building’s lobby told staff the cafeteria would be closed until 11.30am.

Hundreds of staff were informed during the meetings that their positions were being cut, sources within the bank said. They also received details of their redundancy packages. One source said staff could be seen saying their goodbyes to colleagues upon leaving the cafeteria.

Speaking outside the bank’s office, one employee told Reuters the cuts had been anticipated for weeks.

‘People have been planning their next moves but it’s a tough market,’ the person said, speaking on condition of anonymity.

Another employee, who asked not to be named, said the bank held a short meeting in its auditorium at 9.30am to inform staff of the cutbacks. 

He said he was later handed an envelope informing him of his redundancy. The staffer said he and his colleagues had known the impending cuts were likely for the past couple of weeks.

Deutsche’s stock price has fallen 10 percent since Sunday’s restructuring announcement to cut 18,000 jobs in a $8.29 billion ‘reinvention’. It is the biggest two-day decline in almost three years.

By 11.49am GMT on Tuesday, shares were down 4 percent on the day, after sliding as much as 6.5 percent earlier. The bank’s bonds also fell.

A five-day view shows Deutsche Bank stock, which plunged more than 5% on Monday

A five-day view shows Deutsche Bank stock, which plunged more than 5% on Monday

Christian Sewing, CEO for just over a year, and his finance chief are on week-long roadshow to explain the restructuring. Sewing plans to invest a quarter of his fixed salary in Deutsche shares, a person with knowledge of the matter said. 

Analysts and investors say Sewing is right to slash Deutsche’s trading desks but question if he can make the plan work in practice when interest rates are still low and U.S. banks have expanded their share of the German market.

‘There seems to be some concerns around the plan details, particularly the ability for the bank to retain revenues while cutting costs,’ one of the bank´s top 25 shareholders told Reuters, citing worries the bank would need fresh equity to execute Sewing´s plan.

Analysts with RBC Capital Markets wrote that the bank’s outlook for revenue growth was ‘ambitious’ and there was a high degree of risk associated with implementing the plan.

Ratings agency Fitch, which last month downgraded the bank to ‘BBB’ status, the lowest investment-grade, echoed this.

‘Cutting back volatile, capital-intensive and underperforming sales and trading activities, and further reducing the cost base should improve profitability and strengthen leverage, but execution risks are high,’ it said.

Deutsche plans to focus on corporate banking and asset and wealth management, areas that can offer more stable revenues than investment banking but are increasingly competitive.

The bank began cutting jobs in its trading business on Monday, with staff laid off in offices stretching from Sydney to New York. 

Read more at DailyMail.co.uk