As far as we can make out, most of the senior people let go in this year’s souped-up annual Goldman Sachs layoffs round have been fixed income salespeople. Now it seems that something similar may be coming to Deutsche.
Just as Reuters reports that Deutsche is preparing to hire 100 equities markets staff, sources say the German bank is also preparing to part company with 40 of its European fixed income sales staff. The layoffs are not expected to happen until May at the earliest.
Deutsche Bank declined to comment on the claims. Under CEO John Cryan’s strategy 2020, Deutsche plans to cut 9,000 people as it exits various regional markets, but to hire 2,000 people for areas like ECM and M&A. Last month, Bloomberg reported that Deutsche intends to do away with 75 jobs in its markets business – a number which may include any coming sales cuts.
Fixed income sales staff are in a period of transition. In a report out last week, banking analysts at Morgan Stanley, said that as banks refocus sales efforts on their most productive clients and service unproductive clients using data-driven computer programmes, many sales staff will find their services surplus to requirement. At Deutsche Bank, 30% of the clients generate 80% of the revenues (as per the chart from the bank below). Could Deutsche get by with 50% fewer fixed income sales staff? Just a thought.
Some of the clients at Deutsche Bank generate most of the revenues:
Source: Deutsche Bank