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Deutsche Bank (DB) Continues Revamping, To Layoff Employees

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Deutsche Bank (DB - Free Report) is mulling to lay off dozens of employees in its global fixed-income unit, Bloomberg reported. Notably, this unit did not undergo job cuts in July when the bank undertook a major overhaul, with plans to slash about 15,000-20,000 jobs, with majority in the equities trading business.

Per the source, high yield, distressed and investment-grade debt teams have major layoffs in New York and abroad. To speed up the transformation strategy for improving profitability as many of the units have underperformed, the bank is making moves to reduce staff.

Moreover, among others, the credit business in Latin America has been closed down. However, some services will be entertained to support the existing clients there. Therefore, as part of major restructuring, chief executive officer Christian Sewing will not spare any division which is unprofitable for Deutsche Bank.

No plan has been provided by Deutsche Bank related to the targeted cuts except that the restructuring will impact all regions. However, in July, the bank dropped hints about the likely retrenchment of more than 900 employees, mostly in the equities trading division.

Though Sewing has not been successful in turning around the bank so far, he continues to undertake several restructuring moves. With an aim to increase exposure to businesses with stable revenues, Deutsche Bank intends to hire about 300 relationship and investment managers in its wealth management division by 2021 across Europe, America and emerging markets.

Though Deutsche Bank’s restructuring efforts, including cost-saving measures, look encouraging, it is difficult to determine how much the bank will gain, considering the prevalent headwinds. Furthermore, dismal revenue performance is another concern.

Deutsche Bank currently carries a Zacks Rank #4 (Sell).

Shares of Deutsche Bank have lost around 13.9% on the NYSE, in the last six months, compared with the industry’s decline of 9.6%.



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