Deutsche Bank has become the latest lender to come up with a sweeping layoff plan as it is considering to cut a third of its retail banking staff, Reuters reported on Tuesday.
The reduction in workforce will be done in two of its major retail banking hubs, Frankfurt and Bonn. The report outlined that, with the mass layoffs, the bank is expecting to reduce its operating cost.
“We will only make our private customer business in Germany profitable and sustainable if we continue to reduce costs significantly. To achieve this, we will have to take further measures,” a letter signed by Deutsche Bank board member, Karl von Rohr noted.
The German bank’s intentions for the harsh move surfaced following the report of similar intentions by HSBC with its retail banking business in the United States. London-headquartered HSBC is further reducing operating costs with a major restructure, costing 35,000 jobs globally.
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Can It Turn Profits?
Though not officially confirmed, the bank is aiming to complete the cuts by the end of 2022, and the most affected unit will be its Postbank retail banking arm. With a reduction in its operating costs, the bank is hoping to become profitable.
Deutsche Bank could not turn any profits in the past five years. Its business suffered heavily from the impact of the ongoing pandemic. For the first quarter of 2020, the bank reported a loss of €43 million, however, that number was better than the initial street estimates.
Meanwhile, the German lender recently sold its retail banking IT operations, Postbank Systems, to Indian software-outsourcing giant, TCS for a token amount of €1.
Many other players and both the retail and investment banking industry are also proceeding with job cuts. Societe Generale earlier planned to reduce 650 jobs, while Amsterdam’s ABN Amro recently decided to cut around 15 percent of its workforce.