Deutsche Bank AG (USA) (NYSE:DB) Chief Financial Officer told his staff representatives that it is possible that his bank may increase the job cuts by double. This step could result in 10,000 more jobs slashes at the German banking giant, according to the source of Reuters.
The bank is considering significant cost cuts to cope up with the worsening profitability condition, aggravated by the huge lawsuit bill at its disposal. The bank faces $14 billion bill from US regulators related to the wrongful sales of Mortgage backed securities (MBS) in the pre-crises period. Investors have been looking at this company with an eye of suspicion; they are aware of the fact that in case the bank is not able to bargain down this lawsuit bill then they might witness a bailout.
Cutting that many jobs might take years but starting now will send a signal to the investors that the bank is determined to do something about its situation. 9,000 job cuts were announced by management in October 2015, and in just a year they look almost ready for another major cut. Around one in five of the bank's employees will be affected by these measures.
Deutsche Bank CEO John Cryan is now reassessing his restructuring strategy to revive his sinking ship. The investors are losing confidence in the stock, as it has plunged by more than 9% in last 30 days. On the other hand, some of the customers are also rushing to pull their money out from this bank to save their money in case the bank goes bankrupt.
Reuters’ source also revealed that the bank might pull-out from some countries in which it does see much potential (without naming the countries). They are examining such countries to see where they can further cut cost. Commerzbank, another big German bank, also announced that they will cut almost fifth of their employees, which is around 10,000 staff.