Deutsche Bank AG (NYSE: DB) recently announced that it will further reduce its workforce in Germany by 1,000 positions in an effort to slash expenses and boost its capital. At present, the multinational bank is arguably the most troubled financial company now. Deutsche Bank has solvency problems and is being pressured by the Department of Justice of the United States.
The German Bank is planning to reduce approximately 9,000 positions by the year 2020 as part of its restructuring efforts. These workforce reductions announced are separate from the 3,000 job cuts it revealed in the month of June. So far, the company plans to slash 4,000 positions for 2016, which is disturbing for investors.
Reliable sources stated that these job cuts will affect the macro research, asset management, as well as global markets department of the company. Deutsche Bank’s Chief Executive Officer Mr. John Cryan has been implementing cost-cutting methods in the recent year in order to increase the institution’s capital, as well as restructure its business model.
One of the multinational bank’s board members pointed out, “We consistently implement our strategy to make the bank more efficient. We are fully aware that today’s decision is a difficult change with significant personal impact for many employees. We will ensure that any staff reductions are carried out in a socially responsible manner.”
Boosting efficiency and reducing costs has been the focus of banks recently as obstacles ranging from high volatility in the market, low interest rates, and plunging prices of crude oil affect the market. The German bank has been one of the companies which have been greatly affected by the present macro-economic situation. Yet, critics assert that Deutsche Bank’s poor management decisions are the main reason for its current depressing condition.
During the previous month, the Department of Justice of the United States asked the global bank to pay a fine worth $1 billion for selling mortgage-backed securities that caused the drop in 2008. The company refused to pay the fine as talks continues between Deutsche Bank and regulators.
After the US Department of Justice demanded the multinational bank to pay the huge amount, the DB stock plunged. Yet, Deutsche Bank shares did gain a bullish momentum as few German officials supported the company, together with the Chief Executive Officer of JPMorgan Chase Mr. James Dimon.
As of 8:27 AM GMT -4 on October 7, DB stock is changing hands at $13.53, down by 0.44 percent or 0.06 points.