Deutsche Bank Stock Plummets After Announcement of 18,000 Layoffs
The stock price of Germany’s largest bank Deutsche Bank has lost 5.39% on Monday, July 8, after it announced 18,000 layoffs as part of a major restructuring.
Deutsche Bank published a media release on its official website on July 7, detailing its “radical transformation” plan that aims to cut the company’s total costs by 25% by 2022. A major part of the new program is a significant downsizing of the bank’s investment department.
Among the other measures that Deutsche plans to take are creating a new Corporate Bank division that will be comprised of two existing divisions, exiting the equities sales and trading business, as well as investing 13 billion euro ($14.6 billion) in technology over the next three years.
According to the press release, these actions are expected to allow the bank to cut total costs by 6 billion euro ($6.7 billion) by 2022, down from the current figure of 23 billion euro ($25.8 billion).
The markets have reacted negatively to Deutsche’s announcement — as of press time, its stock is trading at 6.78 euro ($7.6), having lost 5.39% on the day.
According to a report by BBC, layoffs began as early as July 8, as some London-based employees of Deutsche Bank were told that they have until 11 a.m. to leave their workplace.
Earlier in June, the New York Times
that the FBI has launched an investigation into Deutsche for potential breaches of anti-money-laundering policy and other crimes.