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Deutsche Bank employees in London have been told to clear their desks immediately, before having their security passes deactivated, according to correspondence from The Telegraph’s Lucy Burton.
The move comes after yesterday’s announcement of a huge restructure which will see 18,000 job cuts as part of a radical reorganisation – The BBC reports. CNBC reported that the bank is set to pull out of global equities sales, trading and scale back investment banking – as well as slash thousands of jobs – to improve profitability.
Burton tweeted earlier today: “Some Deutsche Bank staff in London told they have until 11am to pack up their stuff, just hours after the overhaul was announced. “I’m just trying to get my head straight,” says one person who has been told his pass will stop working in a few hours.”
Anonymously, one Deutsche Bank employee told HR Grapevine that many staff knew this was coming. "It felt like an open secret for all of last week. people knew something was coming especially when Garth Ritchie 'left by mutual agreement'."
Staff who have not initially lost their jobs have meetings with senior management to discuss the future. It is expected that job losses will take place over the next two years.
Sunday's announcement
In an email to colleagues, CEO Christian Sewing said he “greatly regrets” the impact that these job cuts will have but it is in the “long-term interests” of the bank.
He wrote: “Dear Colleagues,
“At the Annual General Meeting in May I said that we would speed-up the transformation of our bank significantly, that we would have to take faster and more radical action. Since then, many of you have asked me when we would announce concrete next steps.
“Today is that day: After further stabilising our bank last year, we are now entering the next phase – and that means nothing less than a fundamental transformation of our bank.
“First let me say this: I am very much aware that in rebuilding our bank, we are making deep cuts. I personally greatly regret the impact this will have on some of you. In the long-term interests of our bank, however, we have no choice other than to approach this transformation decisively. Only then can we build on our long-standing history and make Deutsche Bank a leading bank once again. A bank which we can be justifiably proud of.
“I will not go over all the details that we just published in our media release.
“I will stress though that what we have announced today is nothing less than a fundamental rebuilding of Deutsche Bank through which we are ushering in a new era for our bank. This is a rebuilding which, in a way, also takes us back to our roots. We are creating a bank that will be more profitable, leaner, more innovative and more resilient. It is about once again putting the needs of our clients at the centre of what we do – and finally delivering returns for our shareholders again.
“The transformation will bring us closer to our core strength, our DNA. Almost 150 years ago, we were founded as a bank that serves German and European companies worldwide, that provides a global network and that paves the road to Europe for international companies and investors. This is exactly the role that the Corporate Bank which we are forming will play. Going forward, our Corporate Bank will also serve the corporate and commercial clients of Deutsche Bank and Postbank in our home market. This division is focused on midcap clients, family-owned companies and multinational corporates. It will hold deposits of more than 200 billion euros and process financial transactions with a value of one billion euros every day.
“Alongside our Corporate Bank will be an Investment Bank that connects our corporate clients with capital markets worldwide. In this division, we will concentrate on those areas in which we have a longstanding expertise – credit, fixed income and currencies, as well as strategic advice. Going forward, our Investment Bank will be smaller – but all the more stable and competitive.
“The strict separation between private and corporate clients also means we will have a much more focused private client business. In our home market, we are already a market leader in many businesses. It is our stated goal also to achieve that position in areas where we are not yet leading but have strong growth potential by offering innovative digital solutions and outstanding advice. The task is to find ways to combine these two propositions, because it is exactly in this combination that our strength lies. In order to achieve this, we need to manage our cost base more efficiently. That is why we will accelerate the integration of Deutsche Bank and Postbank…”
Sewing defended the move in an earlier conference call with the media. “We tried to complete in nearly every corner of the banking market at the same time. We simply spread ourselves too thin.”
Philip Augar, a former Investment Banker, told BBC Business: “Deutsche has been limping along for the last ten years making today an inevitable decision.”
Job cuts are devastating for employees and it is crucial that they are given the support that they need in order to finish up working at their current company and move onto their next career opportunity. To limit the damage, HR should be involved in the restructuring process.
How can HR manage a restructure?
HR plays a central role in keeping the company cool during organisational upheaval. While business change is inevitable and inescapable, there are things that HR can do to exercise some form of damage control.
Appoint a leadership team
Strong leadership ensures that the transition is smooth, therefore, senior individuals who are powerful in terms of status and have a trustworthy reputation are key. They should communicate clearly with employees about what is going to happen and reassure them if their job is safe.
Communicate the vision
Defining the end goal is crucial so that employees are clear on what they’re working towards. Cost-cutting exercises may be inevitable, but this doesn’t translate into a vision. Give employees context for the change and this will help them come to terms with the new running of business operations.
Keep the right talent
While job cuts may be part and parcel of cutting costs, think carefully about the staff that you want to keep. Forget about past success, select those with a forward-thinking focus and who will bring skills to the table that are needed for the future of the business.
Celebrate success when it happens
While it can be difficult to see the light at the end of the tunnel, when you eventually get there, acknowledging and celebrating milestone achievements is key. This will also help employees feel valued too.
Charlie
Forget about past success? So those that have shown commitment, loyalty and kept the bank afloat during what is deemed a decade of 'limping along'?
Yes, understandably you want to move forward with your strongest team but to say 'forget about the past successes' … this is where a whole heap of problems are caused. You get rid of experienced talent that may be not quite up to speed due to the reputation of the bank and nothing to do with their own individual talents.
Such shortsightedness makes be sad and if I am totally honest, a bit angry.
Look at the top first - move some of the fat cats out and the ranks below will be able to fulfil their roles effectively and efficiently and give your clients and customers the much needed stability whilst you go through the changes at the top.
Your customers & clients build relationships with the work force, not the directors and people buy from people - FACT!
Such total ignorance to make such a statement!