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Deutsche Bank Workers, Unnerved by Budget Cuts, Press Managers for Details on Layoff Plans

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Unlike Jürgen Fitschen, the co-chief executive of Deutsche Bank, seen here left with former Olympic swimming medalist Franziska van Almsick on July 16, 2014, in Aachen. employees at Germany's bank are worried about layoffs and demanding answers.
  • Why it matters

    Why it matters

    Employees of Germany’s largest financial institution are concerned that the bank wants to boost cost-cutting to €7 billion by 2018 from a planned €4.5 billion.

  • Facts

    Facts

    • Cutting costs is at the heart of a Deutsche Bank “operational excellence” program launched in 2012.
    • Thousands of jobs could be in jeopardy, but management has yet to share information with the supervisory board and workers’ council.
    • Operating costs at the bank, based in Frankfurt, are high compared with global competitors.
  • Audio

    Audio

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Tensions are rising among the management board, the supervisory board and the workers’ councils at Deutsche Bank over speculation the bank will push even harder for cost savings by slashing expenses by between €6 billion ($8.06 billion) and €7 billion by 2018.

Initially, the bank set a goal of €4.5 billion in savings when it unveiled its Operational Excellence program in 2012, but sources say co-chief executive officers Anshu Jain and Jürgen Fitschen want more, which would likely mean a steep reduction in the number of employees. The bank is also struggling with soaring information technology costs.

Employee compensation accounts for more than 43 percent of Deutsche Bank’s expenses. Financial statements show IT costs have risen 19 percent to €804 million from the first quarter of 2012 to the first quarter of 2014.

A source within the employee ranks said rumors about additional cost-cutting measures have been swirling around the bank for several weeks, but workers have been given no solid information by management. Some observers believe Deutsche Bank will wait until after the summer break to make any announcements. A spokesperson for the bank refused to comment when contacted Friday.

Sources told Handelsblatt that Mr. Jain and Mr. Fitschen are committed to the new cost-cutting goals, but the workers’ council reportedly was taken by surprise and has demanded a prompt explanation of how and why management is raising the bar. A workers’ representative said Henry Ritchotte, chief operating officer and managing board member, will be asked to meet with workers and detail exactly what additional measures will be sought. Another insider expressed amazement that management has not yet revealed its plans, even though rumors are creating anxiety and unease among employees.

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