The third quarter of 2015 was a bad year for Deutsche Bank as the German lender reported on Thursday losses of $6.6 billion. However, the impact of the huge financial losses would go beyond this year.
The New York Times reports that new bank co-chief executive, John Cryan, announced that up to 35,000 workers stand to lose their jobs in the next 24 months as the bank slashes jobs as part of the lender's internal cuts and sale of businesses.
He says the bank would close in 10 countries and transfer trading operations in Brazil. The overseas units that would close are in Argentina, Chile, Denmark, Finland, Malta, Mexico, New Zealand, Norway, Peru and Uruguay.
Back-office operations would be further centralized as part of the company's new investment banking structure. Deutsche Bank plans to split into two its investment bank and cut investment banking clients by half, particularly in nations with higher operating risks.
Deutsche Bank would instead rely on about 30 percent of its clients that account for 80 percent of the company's revenues in its investment banking divisions.
To be affected by the job cuts are 9,000 full-time employees internally and 6,000 external contractors in information technology. On top of that, another 20,000 would join the ranks of the unemployed in the next two years as the bank sells or exits some businesses which would save the German banking giant €4 billion annually.
At a press conference in Frankfurt to announce the drastic changes, Cryan said, "Deutsche Bank does not have a strategy problem. We know exactly where we want to go."
He continued, "However, for many years now, Deutsche Bank has had a serious problem with executing the strategy."
As part of the bank's updated strategy, the lender suspended on Wednesday its dividend for 2015 and 2016 fiscal years.
Commenting on Cryan's move, PIMCO global head of financial research Philippe Bodereau, said that the bank chief executive "has a track record of being an executive who believes in the validity of having very strong capital ratios and leverage ratios," quotes CNBC.