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Deutsche Bank AG’s equities traders started bracing for the inevitable on Sunday night, shortly after the news broke that their business was being closed.
They received an email from human resources telling them to show up to work Monday at 8 a.m., according to one recipient who asked not to be named. At a morning meeting with H.R., they were told their badges would be disabled by 11 a.m.
By 10 a.m., dozens were seen leaving the building near London Wall with thick white envelopes detailing their exit packages. Some were crying as they left. More than a few headed to the nearby Balls Brothers restaurant and bar and were seen downing prosecco and beer.
The job cuts started in Asia, as Deutsche Bank began winding down its equities business from Sydney to Mumbai just hours after announcing that its 91,000-person workforce would be reduced by a fifth. But the ax swung deeper in London, which houses about 7,000 of Deutsche Bank’s U.K. employees and is the hub for the investment bank that’s bearing the brunt of the downsizing.
Chief Executive Officer Christian Sewing was in the building as the cuts got under way. A black Mercedes could be seen pulling away from a side entrance following a conference call he led on the extent of the bank’s overhaul.
shares dropping 5.8% in Frankfurt.
The cuts come during a
gloomy summer for banking jobs in the U.K. capital, as Brexit collides with beleaguered investment-banking returns to produce thousands of redundancies.
“It’s a bad time to be looking for a job with the normal summer lull and generally poor market conditions,” said Joseph Leung, managing partner at Aubreck Leung, a London financial-services executive search firm. “That said, the Deutsche people could be attractive as they are effectively free agents — they will likely be getting their stock and won’t have any notice period, so can start straightaway.”
At New York’s 60 Wall Street, the American headquarters, one of the rooms used for job cuts was divided into three sections alphabetized by employees’ last names, with H.R. representatives handing out envelopes, said an employee whose position was eliminated. Those who lost their jobs were given two weeks of base salary per year at Deutsche Bank, with a minimum of eight weeks of pay, said the employee, who wasn’t authorized to speak about the cuts. Workers were told they needed to leave the offices by midday. The employee said he was given less than an hour to depart.
A Deutsche Bank spokeswoman declined to comment on the process.
Outside the building, some workers arrived with bags to carry out their personal belongings, and others left with thick, letter-sized white envelopes — similar to those seen in London. Several employees said they were told not to talk about the job cuts. Nearby, others, envelopes in hand, made plans to meet up for drinks at a local bar. One former employee was crying. Those who kept their jobs ventured out to grab coffee or a doughnut.
The signs of
pending doom were evident at the Wall Street offices even before the official announcement. On the 46th floor, brown boxes had been stacked in the offices of the senior-most executive in the Americas. More than 40 flights down, on the trading floor, seats sat empty at midmorning even a week ago.
At Deutsche Bank’s sprawling Jacksonville, Florida, campus, somber employees came and went Monday morning, to cars parked amid palm trees and an artificial pond. Workers declined to comment on the cuts. The campus has helped develop the city into a hub for middle-class finance jobs that go beyond call-center and back-office tasks.
A total of 18,000 jobs are due to be cut as Deutsche Bank exits the equities business in a 7.4 billion-euro ($8.3 billion) restructuring intended to turn around years of decline.
Other major stories on Deutsche Bank today:
Deutsche Bank Executives Who Won and Lost in Shakeup
No Matter 18,000 Lost Jobs, Germany OK With Deutsche Bank Cull
BNP Takes Advantage of Deutsche Bank Revamp With Equities Deal
Deutsche Bank Credit Risk Tumbles as Lender Reveals Revamp
What was once Europe’s dominant financial institution was virtually out of options after the collapse of merger talks with Commerzbank AG in April and the failure of incremental reforms in recent years. So, a year before its 150th anniversary, Deutsche Bank conceded it could no longer go head to head with the giants of global finance and decided to go back to what it was created for in the 19th century: serving Germany’s big companies.
The overhaul sets up a corporate bank “to focus our bank on where we are most competitive,” Sewing said Monday. The “days of spectacular ambition” in investment banking are over, he said, with the goal to make the division “fiercely competitive, well-respected and sustainably profitable.”
In Asia, the equities-group cuts include almost all research analysts based in the region and most of the sales and trading team, according to people familiar with the matter. In a note to clients in Australia, Deutsche Bank said it would stop providing local research as well as some sales and trading services.
As staff learned their fates, Deutsche Bank’s senior executive in the region said in an internal memo that it was “absolutely committed” to Asia. Though the investment-banking unit would be smaller, it would be “more resilient,” wrote Werner Steinmueller, CEO of Asia Pacific. He didn’t provide details on local job cuts.
Hong Kong-based employees had begun packing up last week, according to two people familiar with the matter. Attendance at Deutsche Bank’s offices in the 484-meter-tall International Commercial Centre in Kowloon had fallen dramatically in recent days, one of the people said. Staff were particularly unhappy about what they perceived as poor communication between Germany and Asia in recent weeks, they said, as reports of massive cuts and a new strategy circulated.
Within hours of Deutsche Bank starting to cull its Hong Kong ranks, property agents were getting ready to search for potential tenants for some of the space it occupies, another person with knowledge of the matter said. Agents have spent months seeking occupants for three floors Deutsche Bank was earlier said to weigh giving up in ICC, but without success so far — in part because landlord Sun Hung Kai Properties Ltd. is selective about the tenants it accepts, the person said.
— With assistance by Harry Wilson, Sofia Horta e Costa, Chanyaporn Chanjaroen, Sonali Basak, and Jake Rudnitsky
(Updates with details of New York cuts in ninth paragraph.)