Deutsche Bank (NYSE:DB) shares slipped by 6.4 percent after it announced to cut more than 7,000 jobs to reduce expenses and return profitability back to reassure investors and clients.
The bank released a statement regarding its Equities business review, in which it was planning to cut the global workforce from approximately 97,000 to 90,000. The job cuts will heavily affect workers located in the New York and London region, where the bank has struggled against its competitors.
Deutsche Bank has already closed hundreds of banks and eliminated thousands of jobs to reduce its expenses in the recent years.
The bank said it will significantly reshape its Equities Sales and Trading business. The bank is aiming to reduce headcount in the segment by as much as 25 percent. The Wall Street Journal reported that the headcount is expected to be less than 10,000.
In Cash Equities, Deutsche Bank will focus on electronic solutions and its “most significant” clients globally. In Prime Finance, the bank will reduce leverage exposure by a quarter or 50 billion euros or $58.62 billion.
The strategic reductions across these segments will decrease in leverage exposure in the Corporate and Investment Bank of over 100 billion euros or nearly $117.26 billion, approximately 10 percent of the 1,050 billion euros of leverage exposure reported at the end of the first quarter of 2018.
“We remain committed to our Corporate & Investment Bank and our international presence – we are unwavering in that,” said Christian Sewing, Chairman of the Management Board.
Sewing became CEO last month after the bank had a management shakeup, leading former CEO John Cryan to leave the bank.
Deutsche Bank has already dismissed 600 investment bankers in the past sevens alone and is expecting to cut spending by up to 1 billion euros or $1.17 billion by the end of 2019.
In 2018, the bank plans not to exceed adjusted costs of about 23 billion euros or $26.97 billion. By 2019, the management board plans to reduce adjusted costs to 22 billion euros. The board reiterates it targets of a post-tax return on tangible equity of about 10 percent, hoping to achieve that target from 2021 onwards.