Deutsche Bank strikes agreement to slash 3,000 jobs in Germany

The headquarters of Germany's Deutsche Bank in Frankfurt, Germany.
The headquarters of Germany's Deutsche Bank in Frankfurt, Germany.PHOTO: REUTERS

FRANKFURT (Bloomberg) - Deutsche Bank, Germany's largest bank, paved the way to cut thousands of jobs in its home market after a first round of meetings with labor representatives.

The bank struck an agreement with its works council to eliminate about 3,000 full-time positions, including 2,500 at its private and commercial clients business, meeting more than 90 per cent of its envisaged cuts, it said in a statement on Thursday.

Deutsche Bank will discuss job cuts at other businesses in a second round of talks, with a third one scheduled for later in the year.

Deutsche Bank chief executive officer John Cryan, 55, is scrapping dividends and selling assets to help bolster profitability and reverse a slump in shares that has eroded 44 per cent of the lender's value over the past year.

As part of his overhaul announced in October, Mr Cryan is seeking to eliminate 9,000 jobs, or about 9 per cent of the global workforce, including some 4,000 positions in Germany.

"We have made a big step forward in rebuilding our bank," Mr Cryan said in a letter to employees. "Making these decisions wasn't easy for us. But we need to lower costs - or else Deutsche Bank won't be able to work in a sustainably profitable manner in a world with extremely low rates and increasingly stricter regulation."

Deutsche Bank plans to cut the number of branches by about 26 per cent to focus on 535 "larger and more efficient" offices and spend about 750 million euros (S$1.14 billion) through 2020 to expand its digital and mobile banking services.

In 2017, it will also open seven customer centres - a new type of branch - employing 360 people.

Mr Cryan has already said that 2016 will be a peak restructuring year, which may spark another loss, as Deutsche Bank seeks to cut about 3.8 billion euros of gross costs by 2018.

The lender last year announced plans to close operations in 10 countries including Mexico, Norway and New Zealand and reduce the number of investment bank clients.

The lender employed 101,445 people at the end of March, including 46,036 in Germany, according to company filings.