Deutsche Bank is now laying off staff in New York after the German investment bank began implementing 18,000 job cuts across the globe, prompting shares to plunge almost seven percent.
The bank sacked workers in New York, Sydney, Hong Kong and London on Monday morning as it launched one of the biggest overhauls to an investment bank since the aftermath of the financial crisis.
It is not yet clear how many jobs in the U.S. have been cut but employees were spotted leaving the Wall Street office on Monday with large white envelopes after being summoned to the cafeteria to learn their fate.
Hundreds of staff in New York were informed during the meetings that their positions were being cut and they received details of their redundancy packages, sources said.
One source said staff could be seen saying their goodbyes to colleagues upon leaving the cafeteria. A notice inside the building’s lobby told staff the cafeteria would be closed until 11.30am.
Employees were spotted leaving Deutsche Bank’s Wall Street office on Monday with large white envelopes after being summoned to the cafeteria to learn their fate
Hundreds of staff in New York were informed during the meetings that their positions were being cut and they received details of their redundancy packages, sources said
In a retreat from a long-held ambition to make its struggling investment bank – which employs 38,000 people – a force on Wall Street, Deutsche Bank revealed on Sunday it would scrap its global equities operations and cut some in fixed income.
The decision, which is part of a sweeping restructuring aimed at restoring consistent profitability and improving returns to its shareholders, sent shares plummeting almost seven percent when trading opened on Monday morning.
Speaking outside the bank’s office in New York, one employee said that staff in the bank’s equity sales division had prepared for the worst for weeks.
‘People have been planning their next moves but it’s a tough market,’ the person said.
Prior to the cuts, one New York employee told Efinancial News they had been locked out of the company systems over the weekend.
‘They kept everyone out of the systems both physically and virtually over the weekend, but for now everything’s open,’ he said after arriving at the Wall Street office on Monday.
He confirmed that members of the equities teams had already been asked to attend meetings later in the day.
‘9.30am is when most people in my division have been asked to report to the auditorium to be fired,’ he said.
Other employees said they had been invited to meetings even if they were on vacation.
People were spotted exiting the lobby the Deutsche bank in New York City on Monday after the German investment bank began implementing 18,000 job cuts across the globe
One source said staff could be seen saying their goodbyes to colleagues upon leaving the cafeteria. A notice inside the building’s lobby told staff the cafeteria would be closed until 11.30am
People are seen in the lobby of the U.S. headquarters of Deutsche Bank in New York City,= on Monday as the investment bank began implementing 18,000 global job cuts
Deutsche Bank had been one of the few European banks to maintain a significant presence in the U.S. after the 2007-2009 financial crisis. However, hampered by regulatory investigations and litigation, it has struggled to compete with U.S. rivals.
The U.S. had been seen as a likely focus of the cuts although the bank maintains that it wants to keep a significant presence, in part to service European corporate clients doing business in the country.
The bulk of the job cuts are expected across Europe and the U.S. but Deutsche Bank has not yet given any geographic breakdown. Deutsche Bank had nearly 91,500 employees globally at the end of March.
In Sydney, Hong Kong and elsewhere in the Asia-Pacific region the working day began with cuts and several Deutsche bankers said entire teams in sales and trading were going.
Some of those roles will be cut immediately, while some staff will be kept on for longer while they help wind down operations.
CEO Christian Sewing said the job cuts will last until 2022.
The bank launched the restructuring on Sunday in Europe, outlining a plan that will ultimately cost $8.31 billion and see it dramatically scale back its investment bank – a major retreat after years of working to compete as a major force on Wall Street.
At Deutsche Bank’s investment banking headquarters in London, where the bank employs 8,000 people, several said they were leaving for the last time, though few were keen to talk.
‘I was terminated this morning. There was a very quick meeting and that was it,’ said one IT worker, who had been working on a project in the bank for more than two years.
The decision to cut jobs sent shares plummeting almost seven percent when trading started on Monday morning
The logo for Deutsche Bank appears above a trading post on the floor of the New York Stock Exchange on Monday
The nearby Balls Brothers pub was filling up with now former Deutsche Bank staff.
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 team was being let go, but that most of its mergers and acquisitions team would not be immediately affected.
Deutsche had some 4,700 staff in Sydney, Tokyo, Hong Kong and Singapore, showed fact sheets on its website.
Its investment banking team for the Asia-Pacific region numbered about 300 people before the cuts, and 10 percent to 15 percent will be laid off – almost all in its equity capital markets division, according to a senior Asia banker with direct knowledge of the plans.
In Hong Kong, a group of three upset-looking bank employees took a picture of themselves besides a large Deutsche Bank logo outside the lender’s office, hugging each other before hailing a waiting taxi.
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.
A man carries a box as he leaves a London office of Deutsche Bank on Monday morning
A man leaves the Deutsche Bank building in central London with some belongings on Monday following the news of global job cuts
Several workers were seen leaving the offices holding large envelopes with the bank’s logo.
‘If you have a job for me please let me know. But do not ask questions,’ said one who confirmed he was employed at Deutsche Bank, but declined to comment further.
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.
The CEO, 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.
‘I am very much aware that in rebuilding our bank, we are making deep cuts. I personally greatly regret the impact this will have on some of you,’ Sewing wrote to staff.
‘In the long-term interests of our bank, however, we have no choice other than to approach this transformation decisively. Only then can we build on our long-standing history and make Deutsche Bank a leading bank once again.’
Sewing will now represent the investment bank on the board in a shift that illustrates the division’s waning influence.
The CEO had flagged extensive restructuring in May when he promised shareholders ‘tough cutbacks’ to the investment bank. This followed Deutsche’s failure to agree a merger with rival Commerzbank AG.