Deutsche Bank said it would lay off 3,500 employees, or 4% of its workforce, to cut costs by 2.5 billion euros ($2.7 billion) a year by 2025.
One of the ways the German lender has chosen to cut costs is by promoting “simplified workflows and automation”, and thus most jobs will be eliminated in the back office. Its net profit before tax fell 14% last year to 4.9 billion euros ($5.3 billion).
Deutsche Bank is the latest of a number of lenders to announce layoffs in recent months. UBS is cutting 3,000 jobs in Switzerland, where it is headquartered.
Citibank, the third-largest U.S. bank, announced last month that it would cut 20,000 jobs over the next two years, the equivalent of 10% of its global workforce, to save $2.5 billion over the long term. term.
January was also when the U.S. financial sector laid off the largest number of workers, 23,238, since September 2018, according to a report from recruiting firm Challenger, Gray & Christmas.
Announcements of layoffs continue at the start of 2024 in a context of massive downsizing in the global financial sector.
According to The Financial Times, Major banks around the world have cut more than 60,000 jobs in 2023, among the highest figures in a year since the financial crisis.
Citibank began laying off employees in November 2023.
In the UK, a number of lenders, including Barclays, Lloyds and Metro Bank, announced headcount reductions around the same time.
Some banks have cited increased automation and the use of artificial intelligence as reasons to reduce payroll.
Lloyds is cutting some roles and only hiring data and technology staff.
The downsizing is also aimed at preparing for a tougher business environment as rising interest rates impact the economy.
Deutsche Bank said it had increased its provisions for potential bad debts by 300 million euros to 1.5 billion euros ($1.6 billion) in 2023, reflecting “the continued challenging impact of macro-economic conditions.” economic and interest rates. CNN reported February 1.
Investment banks, which had to reduce their salary costs last year, are expected to continue their workforce reductions.
“There is no stability, no investment, no growth in most banks, and there will likely be further job cuts.” The Financial Times quoted Lee Thacker, founder of British financial services provider Silvermine Partners.
