Deutsche Bank will cut approximately 18,000 jobs over the course of the next three years as part of a major reorganization, BBC reported Sunday.
The rumors were confirmed by the bank, who said it would completely abandon all operations related to the buying and selling of shares.
According to the report, most of these operations are conducted in New York and London, with the latter Deutsche Bank’s largest trading hub - with some 8,000 employees. The announced cuts amount to some 20 percent of the bank’s workforce, The Guardian report says.
By 2022, the Bank intends to reduce its workforce to 74,000 employees, and the restructuring operation is expected to cost approximately $8.3 billion over three years.
"Today we have announced the most fundamental transformation of Deutsche Bank in decades," chief executive Christian Sewing said, according to BBC. "This is a restart for Deutsche Bank... In refocusing the bank around our clients, we are returning to our roots and to what once made us one of the leading banks in the world. Deutsche Bank has been through a difficult period over the past decade, but with this new strategy in place, we now have every reason to look forward with confidence and optimism.”
In 2018, Deutsche cut 6,000 jobs, The Guardian says.
The reorganization announcement comes after the failed merger negotiations with its national rival, Commerzbank, BBC notes. Despite government support of the merger, the two banks concluded that the deal was too risky, and noted that downsides outweighed benefits.
Deutsche Bank has also reportedly been struggling for years with the gradual decline of its investment division and has made several attempts to give its business a second wind. On Friday, Deutsche Bank announced the resignation of investment head Garth Ritchie, and teased a plan to save Deutsche $19 billion by 2022.
The bank has also created a new unit tasked with the liquidation of unwanted assets, estimated to total some $84 billion.
Deutsche Bank has taken multiple blows to its reputation over the past year, The Guardian report noted. The bank failed US bank stress tests, suffered downgrades to its investment grade ratings, and, to add insult to injury, had its offices raided by German law enforcement in November 2018 as part of a money-laundering investigation linked to the Panama Papers leaks.
This year, the bank also came under scrutiny over a New York Times article claiming that Deutsche’s top executives ignored warnings on suspicious financial operations by US President Donald Trump and his son-in-law, Jared Kushner, and refused to file reports to federal financial crimes watchdog.
Trump rejected allegations of wrongdoing, claiming that he “does not need banks” while calling Deutsche “very good and highly professional.”