Large white envelopes, tearful eyes, downcast faces and a clutch of bags and boxes; these were the tell-tale signs of which workers were leaving Deutsche Bank’s offices in London, New York and Tokyo for the last time, as Germany’s biggest lender kicked off its mammoth 18,000 dismissals on Monday.
The axe fell first in Asia, only hours after Deutsche ended its 20-year drive to be a Wall Street powerhouse by announcing massive cuts to its investment bank, including shutting its lossmaking equities trading business, shrinking its bond and rates trading operations and putting $288bn of assets into a noncore division.
On Monday morning, following a flurry of restructuring announcements, senior managers in Tokyo convened a brief meeting to tell colleagues that the equities trading operation across Asia would be shut. The bank’s human resources team started group sessions with affected employees immediately afterwards.
The ripples were felt far wider than those losing their jobs immediately. In Singapore, an employee not directly affected by the cuts told the Financial Times: “The mood is always depressed in Deutsche. People know the bank is not doing well . . . It’s not like a party.”
In London, one meeting was held at 7.30am for employees who would be kept on and another at 8am for those who were at “risk of redundancy”, according to an employee. At least 100 permanent staff were in the second group, according to a person involved with the dismissal process, before being allowed to go home.
‘“I understand the logic behind the decision [to axe jobs] but I’m not sure if this will work for Deutsche Bank in the future,” said an employee who had worked in the bank’s equity department in London for 20 years before being told he was at risk of losing his job and sent home. “I don’t think management is sure either”.
The mood was sombre at the bank’s City headquarters, which is hit hard because it is a major centre for Deutsche’s trading business. Every so often, someone emerged carrying a small box containing objects from their desk, one rushed out with tears rolling down her cheeks, speaking animatedly on the phone.
“It was very emotional, there were plenty of tears, of course,” said an equities banker who had been let go. “I would go back tomorrow if they wanted me,” he said, standing outside Deutsche bankers’ favoured London pub, Balls Brothers, with a glass of rosé. His 11 years at Deutsche, spread across two stints, were his finest in the banking industry, he said.
One London-based employee, who said he had been sent home shortly after arriving at work, blamed tough government regulation for European banks’ failure to compete with Wall Street rivals. “Since the financial crisis [European] governments have engaged in banker-bashing and enforced crippling regulation,” he said. “I don’t think we’ll be the last European bank to do this. The Americans have won the war, good for them.”
Deutsche chief executive Christian Sewing told journalists on Monday morning that the job cuts “have been the most difficult and painful part of our decision making” as “people and their fates are very important to us”, adding that the bank needs to be honest with itself and “say where we are strong and where we are not”.
An employee from the equities department who was smoking a cigarette outside the London office said he had come into work fearing the worst, and was surprised to find he was not called into the dismissal meeting. “There’s still a sense that I could go soon,” he said. “People are very demotivated.”
In New York, home to a large portion of Deutsche’s equities and fixed income trading businesses, dismissed employees began to trickle out from about 8.30am, having been given the choice of staying for three hours to clear their desks or leaving immediately. “You OK?” a Deutsche Bank worker called to a colleague hauling a large shopping cart. “No, I’m gone,” she replied, after telling the Financial Times she could not talk.
Others followed later, most of them avoiding reporters, with one saying “they would kill us if we spoke”. He added that his division, corporate finance, was “doing great”. Loren Amsden, an anti-money laundering consultant on assignment at Deutsche, said there had been no job losses in his area and that he was “surprised” by the cuts given that Deutsche was still hiring contractors.
A 5 per cent fall in Deutsche shares raised doubts with some on whether it was all worth it. “I understand the logic behind the decision [to axe jobs] but I’m not sure if this will work for Deutsche Bank in the future,” said an employee who had worked in the bank’s equity department in London for 20 years before being told he was at risk of losing his job and sent home. “I don’t think management is sure either”.
Additional reporting by Leo Lewis in Tokyo and Stefania Palma in Singapore