Deutsche Bank has begun a round of job cuts which is expected to affect at least 250 of its employees around the world. Indications are that the layoffs could reach and even exceed a total of 500 people, including some located in London and New York.
Deutsche Bank’s decision is part of a cost-cutting effort initiated by the bank’s Chief Financial Officer James von Moltke, who has urged the bank to exercise proper money and cost management practices, following the abandonment of last year’s targets.
One of the units taking the brunt of the cutbacks is the bank’s investment banking division, as some mid-level and senior positions have already been trimmed. Some noteworthy layoffs include Marc Benton and Evans Haji-Touma, who focused on European energy investment banking and sovereign wealth and public pension funds, respectively.
Gold Investing Reinvented with First Ever YieldGo to article >>
2017 was a difficult year for the German investment bank, exemplified by the bank recording a yearly loss of €497.0 million. The bank was highly impacted by the implementation of the Tax Cuts and Jobs Act of 2017 in the US, which led to a non-cash tax charge of €1.4 billion.
Fines and Penalties Add to Costs
Also contributing to the costs of the bank were various fines and penalties issued over the past year, in response to violations of financial regulatory conditions. Deutsche Bank was the recipient of allegations for its part in conducting FX market rigging. The bank ultimately reached a settlement, which obliged it to pay $190 million.
In another similar case, the bank was accused of participating in interest rate manipulation in the US, for the purpose of gaining a competitive advantage to yield profits. As a result of the misconduct, the Commodity Futures Trading Commission (CFTC) ordered Deutsche Bank to pay a $70 million civil monetary penalty.
While the extent that the layoffs will reach remains unclear, it is evident that Germany’s largest lender is taking appropriate steps to curb its costs in any way possible, as they gear up to try and turn the downward trend around in 2018.