by Mish Shedlock, The Maven:
18,000 Job Cuts
18,000 Job Cuts
Deutsche Bank embarked Sunday on what may be its last chance to reverse a decade of decline, announcing that it would cut a fifth of its work force and slash operations in New York and London.
About 18,000 people will lose their jobs as Deutsche Bank closes or shrinks operations that sell stocks and bonds. One-third of the management board will leave the bank as part of the overhaul, and more than $300 billion in risky assets will be quarantined in a separate unit.
The question in the months ahead will be whether the turnaround effort by Christian Sewing, Deutsche Bank’s 49-year-old chief executive, comes too late. “We are returning to our roots and to what once made us one of the leading banks in the world,” Mr. Sewing said in a statement on Sunday.
Deutsche Bank’s appetite for risk was perhaps epitomized by its relationship with Mr. Trump. Deutsche Bank continued to lend to the Trump Organization long after other lenders concluded that the risk was too great. In the last year, Deutsche Bank has also been burdened by investigations of lax money laundering controlsand has been under intense scrutiny by regulators in the United States and Europe.
Just One Problem
“The plan announced Sunday does not address another urgent problem, the lack of profitable businesses with potential for growth.”
Other than that minor problem, cutting 18,000 is a start of a return to the roots.
To truly return to the roots, Deutsche Bank needs to go bankrupt.