Ever since various banks promised not to cut jobs during the COVID-19 pandemic, it's been questionable what 'the pandemic' constitutes. If the virus recurs every year, as predicted by Chinese scientists, does this imply that banks won't cut jobs for the forseeable future? - If there's a second wave in the winter, will they wait to cut until early 2021? What if there's a third wave after that?
Speaking today, Deutsche Bank CEO Christian Sewing, offered some clarity. Deutsche Bank will resume its planned job cuts when lockdowns are relaxed, suggested Sewing. "In the first phase of the crisis we didn't want to communicate additional layoffs," he explained. "We are actively reviewing when we are changing that." With the "lifting of restrictions," Sewing said job cuts could resume; he noted that restrictions have already been eased in Germany - implying that cuts could start again there soon.
Deutsche Bank announced plans to cut 18,000 jobs globally over three years in July 2019, with half the cuts to come in Germany. At the start of this year, there were 14,000 cuts to go. Layoffs were paused around March 27th 2020 to "avoid additional emotional distress" to employees. However, as we noted earlier today, this didn't prevent Deutsche from cutting 4,182 from its investment bank (mostly from the back and middle office) in the first quarter up until that point.
Sewing's comments today suggest Deutsche staff might want to brace themselves for renewed cuts in May and June. Alternatively, they might derive perverse reassurance from the suggestion that Germany might have to reimpose a tighter lockdown as the virus is spreading more rapidly again.
Like Jes Staley at Barclays, Sewing also suggested today that the cost reductions made as a result of the virus might persist. Under the pandemic, Deutsche has saved on travel, real estate and entertainment costs, said Sewing. "We have a chief transformation officer who is looking at all that we have changed over the past few weeks," he said, adding that where possible the changes could persist even after the pandemic passes.
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