The German megabank Deutsche Bank terminated the jobs of eighteen thousand people as reports came out showing her holding massive debts as the German economy continues to weaken according to a report:
Deutsche Bank announced Sunday that it will pull out of global equities sales and trading, scale back investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability.
Deutsche will cut 18,000 jobs for a global headcount of around 74,000 employees by 2022. The bank aims to reduce adjusted costs by a quarter to 17 billion euros ($19 billion) over the next several years.
The German bank’s decision to scale back investment banking comes just two days after investment banking chief Garth Ritchie stepped down by “mutual agreement.”
Deutsche expects its restructuring plan to cost 7.4 billion euros by the end of 2022. The German bank may report a net loss of 2.8 billion euros in the second quarter of 2019. It will release second quarter results on July 25.
Deutsche Bank’s supervisory board met on Sunday to hash out the restructuring plan. The bank’s CEO, Christian Sewing, had broadcast “tough cutbacks” during a shareholders’ meeting in May.
“Today we have announced the most fundamental transformation of Deutsche Bank in decades,” Sewing said Sunday in a corporate press release.
Deutsche had previously considered merging with rival Commerzbank to shore up its position, but merger talks collapsed in April. An industry source told CNBC that there wasn’t enough support for a merger within Deutsche.
The German lender once sought to compete with America’s big banks on Wall Street, but has been pummeled by scandals, investigations and massive fines stemming from the financial crisis and other issues in recent years.
Deutsche reached a $7.2 billion settlement with the U.S. Justice Department in January 2017 for allegedly misleading investors in the sale of mortgage-backed securities in the lead-up to the 2008 financial crisis. Weeks later, the bank was slapped with a $630 million fine over allegations of Russian money laundering.
Those penalties came two years after the bank paid a $2.5 billion fine to U.S. and U.K. regulators for allegedly participating in a scheme to rig interest rates.
Deutsche has come under renewed scrutiny in the U.S. over its business relationship with President Donald Trump. The House Intelligence and Financial Services Committees subpoenaed Deutsche in April for records on Trump’s finances.