Deutsche Bank Is Said to Begin Companywide Hiring Freeze
Deutsche Bank has instituted a company wide hiring freeze as the embattled lender looks to speed up efforts to reduce costs and regain the confidence of investors as concerns mount about the progress of its turnaround, according to a person familiar with the bank’s plans.
The bank, Germany’s largest, has seen its stock price decline more than 50 percent in the last year as it has posted a string of poor financial reports and struggled with difficult markets. Its American subsidiary failed a stress test by the Federal Reserve in June.
The International Monetary Fund also said in a report on the German financial industry this year that Deutsche Bank appeared to be “the most important net contributor to systemic risks.” The I.M.F. did not step backfrom that view this month.
Its shares have been pushed to new lows in recent weeks on worries that the lender may be forced to pay billions of dollars in fines in the United States Department of Justice’s investigation of its underwriting of residential mortgage-backed securities. The Justice Department has proposed that the bank pay as much as $14 billion to settle the case.
The lender is restricting new hiring across its business for the time being, but it would still make external hires as necessary for crucial functions, such as compliance or anti-money-laundering programs, said the person, who was not authorized to discuss the matter publicly.
Deutsche Bank declined to comment on Thursday.
The freeze is the latest move by Deutsche Bank as it pushes forward a turnaround plan announced last year by its chief executive, John Cryan, to overhaul itself and eliminate as many as 35,000 jobs through internal cuts and the sale of businesses.
Under the plan, the bank said it would eliminate about 9,000 full-time jobs and about 6,000 external contractor positions.
As the end of June, Deutsche Bank had 101,307 employees. By comparison, the bank had 98,647 full-time employees at the end of the second quarter in 2015.
As part of those efforts, Deutsche Bank said in September that it had agreed to sell its Abbey Life insurance business to a subsidiary of Phoenix Group Holdings, which specializes in buying closed life insurance pools and pension funds, for 935 million pounds, or about $1.1 billion.
This month, Deutsche Bank, which is based in Frankfurt, said it hadreached an agreement with employee representatives to cut 1,000 jobs in Germany, on top of 3,000 cuts agreed to in June.
Shares of Deutsche Bank fell about 3 percent in afternoon trading on Thursday in Germany.
Source: NYTimes
