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Deutsche chops dozens of 'safe' jobs in fixed-income trading

Unit was largely spared during first round of reductions in bank's overhaul two months ago; CEO still on prowl to cut losses

New York

DEUTSCHE Bank is cutting dozens of traders and sales-people in its global fixed-income ranks, a unit that was largely spared from the first round of reductions in the firm's overhaul two months ago.

The bank has let go employees in high yield, distressed and investment-grade debt teams in New York and abroad, according to people familiar with the matter, who asked not to be identified discussing personnel matters.

The reductions are largely tied to the underperformance of some divisions, such as the credit business in Latin America, which is being eliminated entirely, one source said.

Deutsche Bank is undergoing a restructuring that will involve 18,000 job reductions across all of its businesses as chief executive officer Christian Sewing tries to turn around years of poor profitability. When executives laid out the plan in July, they slashed the equities-trading division but stayed committed to most of the fixed-income unit, under the strategy of focusing on businesses where the bank is a leader.

The bank's head of debt trading, Ram Nayak, even told staff at the time that the restructuring wouldn't lead to dismissals in his business. Those assurances were soon overridden when it became clear that Mr Sewing isn't exempting any area as he scours the bank for unprofitable businesses he can weed out.

The bank has previously shown a willingness to shift its plans. In late July, it moved some equities revenue back into the investment bank from the wind-down division it had set up as it decided to keep more services from stock trading.

And despite the credit businesses' pullback in Latin America, the firm plans to maintain some services to provide continuity for clients there.

The firm has already parted ways with senior fixed-income veterans, including John Pipilis, who oversaw the entire unit globally, and Paul Huchro, a credit trading executive who Bloomberg reported this week was leaving.

Managing directors Eric Eisner and Paul Delaney in the Latin America unit, Timothy Fischer in leveraged credit sales, and Andrew Meany in credit trading are all leaving as part of the moves, sources said. Mr Meany declined to comment, while the other three didn't return calls seeking comment.

Deutsche Bank hasn't broken down the geographical and divisional spread of the targeted cuts except saying it will affect all regions. The lender said in July that it informed more than 900 staff - mostly in equities trading - that their employment will end since the restructuring announcement.

While Deutsche Bank undertakes the huge overhaul, it is still hiring in areas where it sees the potential for growth, such as in wealth management. The lender hired a team of around a dozen private bankers from Credit Suisse this summer as it shifts resources. The lender's wealth management business is small compared with Swiss rivals, but it's one area Mr Sewing wants to expand.

Initial optimism surrounding Mr Sewing's sweeping revamp has quickly given way to doubts over whether the German lender can reach its profit goals in a competitive home market and an economic slowdown.

The bank has consistently disappointed shareholders in recent years, and after the overhaul will be focused on servicing companies' routine financing needs while also withholding dividends for this year and next. BLOOMBERG