Bankers who are being laid off at Deutsche Bank have a new insult to add to their injuries: small severance payments. According to those who’ve been let go, the bank is paying the UK statutory minimum.
The British government mandates that employees who are made redundant after more than two years’ employment should receive one week’s pay for every year they were aged between 22 and 41, and one and a half week’s pay for every full year they were aged 41 and older.
Deutsche Bank didn’t immediately respond to a request to comment on its redundancy payouts, but Deutsche insiders said the bank typically pays laid off employees one week’s pay per year served. The low rate allegedly reflects a cut to Deutsche’s severance pay which happened nearly twenty four months ago: “Until March 2016, people were getting a month per year served,” says one M&A banker.
Employment lawyer Philip Landau at Landau Law, says most banks will not be explicit about how severance payments have been calculated, but that this is quite low. “A more typical redundancy payment from a bank is one month for every year worked,” he says.
Deutsche Bank has promised to get “aggressive” about costs and is making between 250 and 500 people redundant from its investment bank in London and NYC. Last week, bankers there were complaining they had yet to find out who was being laid off. With redundancy payments so low, they might want to hang on a few more years anyway.
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