Beleaguered German firm Deutsche Bank is laying off 18,000 employees as a part of its “radical transformation,” and many of them have a rough road ahead, predicted one recruiter.
“Those that spent time building relationships will be able to use their Rolodexes to find another job,” Charles Skorina, head of an eponymous executive search firm, said by phone Monday. “Those that buried themselves in their work and didn’t get out and meet others will have more trouble.”
The firm plans to exit its equities trading and sales businesses and to “resize” its fixed-income operations, according to Deutsche Bank’s July 7 announcement. “The restructuring actions will include a workforce reduction of approximately 18,000 full-time equivalent employees to around 74,000 employees by 2022.” All in, the statement said, the bank “expects to reduce adjusted costs by approximately €6 billion (US$6.7 billion) to €17 billion in 2022.”
“If you’re an equity analyst, you’re just screwed,” Skorina said. “Or even a bond analyst for that matter. If you’re in liquid markets, I think you’ve got a problem.”
He noted that the industry currently prefers specialists over generalists, which could make the job market difficult for an equities or bond analyst. According to Skorina, those with previous experience in private equity or hedge funds will likely benefit from their connections.
If the layoffs extend beyond analyst teams, Skorina said that some folks could find themselves in demand. “Remember there’s a lot of back office staff, and we’re not just talking about analysts and traders.” People who work in operations in financial services are in demand right now, the recruiter added.
The cull will not impact the asset management arm DWS’ staff, structure, or strategy, a spokesperson said via email Monday. DWS is majority owned by Deutsche Bank, which spun it out last year. Bank spokespeople did not respond to questions Monday about how the layoffs would be distributed across the firm.
[II Deep Dive: Deutsche Bank to Scale Back U.S. Business, Lay Off Staff]
As for the labor market as a whole in banking? Things aren’t so bad, according to Skorina.
“People are careful because they don’t know what’s coming up, but banks and investment firms are still hiring,” Skorina said. Deutsche’s now-former employees will face a friendlier job market than the professionals laid off during the Great Recession, which still looms large in the financial world’s collective memory, he noted.
In addition to slashing staff, Deutsche Bank is making board-level changes as part of its shakeup.
New management board members include Christiana Riley, chief financial officer of the corporate and investment bank; Bernd Leukert, a management board member at SAP SE; and Stefan Simon, who will take over as chief administrative officer; according to the July 7 announcement.
Board members Sylvie Matherat and Frank Strauß will leave the bank as of July 31.