Deutsche Bank’s CEO Hints at Thousands of Job Cuts
Deutsche Bank (db) CEO John Cryan dropped his clearest hint about the scale of his planned slash-and-burn exercise at Germany’s biggest lender.
“We employ 97,000 people,” Cryan told the Financial Times. “Most big peers have more like half that number.”
Cryan has warned repeatedly that technology will allow big savings across his sprawling empire, and recent media reports suggest he’s under increasing pressure from shareholders to deliver, having also suspended the bank’s regular dividend. Only 4,000 of the 9,000 job cuts promised under a five-year restructuring plan–announced in late 2015–have so far taken place.
“We’re too manual, which can make you error-prone and it makes you inefficient. There’s a lot of machine learning and mechanisation that we can do,” Cryan said.
Read: Brexit: Deutsche Bank May Move $ 350 Billion from U.K.
The ratio of revenue-generating staff on the front-end to those who keep the bank running in the back office is “out of kilter” said Cryan. The comment reflects similar thinking that was voiced during a conference in September, where the chief said the bank’s accountants “spend a lot of the time basically being an abacus” and were ripe for being automated.
Cryan told the FT that further branch closures and cooperation with rivals in the area of crime prevention and detection were also areas where savings can be made. “Every bank at the moment has a huge and burgeoning department of people who are doing the same stuff,” he said. “It’s not a source of competitive advantage and you’re exposed to making your own mistakes.”
Read: Deutsche Bank Is Going to Keep a Lot of People in London, Come What May
Cryan has raised €8bn of capital since he took over Deutsche in mid-2015, and in January reached a $ 7.2 billion settlement with the U.S. Justice Department over the sale of toxic mortgage securities leading up to 2008’s financial crisis. However, the Briton has come under fire from investors over the bank’s poor operating performance, with substantial declines in business at its investment bank. The investment bank had been Deutsche’s main source of profits before the crisis, but a long list of scandals from subprime mortgages to mis-selling derivatives and rigging benchmark interest rates has exposed how unsound the foundations of that business were.
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