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Deutsche Bank said to weigh cutting jobs on top of Postbank sale
[LONDON] Deutsche Bank AG is considering cutting as many as 8,000 jobs in addition to selling a consumer-banking unit, which would shrink the total workforce almost 25 per cent, according to a person familiar with the matter.
The new cuts would probably mostly affect administrative and technology jobs, although some client-facing positions may be eliminated, said the person, who asked to remain anonymous because the plans are confidential. A plan to divest Bonn-based Deutsche Postbank AG, which employs about 15,000, is still part of the strategy, the person said. A final decision will be made next month, the person said.
Deutsche Bank, which runs Europe's biggest investment bank, employed 98,647 people at the end of June. Klaus Winker, a company spokesman, declined to comment on Monday.
Co-Chief Executive Officer John Cryan, 54, who replaced Anshu Jain in July, is pressing ahead with the bank's plan to bolster profitability by reducing expenses and cutting back businesses.
On his first day in the job, he pledged to sell the Postbank unit, as outlined in April, and tackle the company's "swollen" cost base and "antiquated and inadequate" technology.
"Given nothing has really happened to Deutsche Bank's staff levels on a net basis, Cryan will have to make some deeper cuts to show he is serious about actually cutting expenses," Jon Peace, an analyst at Nomura Holdings Inc. who has a neutral stance on Deutsche Bank, said by phone from London.
"A decrease in the order of 10 per cent of staff after the sale of Postbank would finally add credibility."
Deutsche Bank's staff levels at the end of June are up 0.4 per cent from the end of 2013, according to the company's filings. Reuters reported the total cuts under consideration earlier Monday.
Mr Cryan aims to complete the bank's plans by the end of next month. When taking over as co-CEO with Juergen Fitschen, he inherited a strategy to boost returns by lowering expenses by about 15 per cent by 2020 and shrinking assets at the investment bank by as much as 17 per cent through 2018.
While that plan foresaw the bank closing as many as 200 consumer-banking branches and exiting up to 10 countries, the company stopped short of saying how many jobs would be lost and where.
Deutsche Bank will probably close most or all of its investment bank's operations in Russia, said the person.
Deutsche Bank has said it plans to divest Postbank by the end of next year via a trade sale or by issuing shares to the public.