If you work for Deutsche Bank and are wondering about the veracity of the redundancy rumours, you do not have long to wait. Deutsche Bank's board meets Sunday to discuss Christian Sewing's proposed 15,000 to 20,000 redundancies and insiders say an announcement is expected Sunday evening. Ominously, there are already signs that DB is preparing for the worst.
"All the meeting rooms have been booked out on Monday morning," claims one Deutsche Bank equities insider. When banks make layoffs, it's common for people losing their jobs to be taken into meeting rooms for a chat with HR and line managers.
Deutsche Bank declined to comment on the availability or not of meeting rooms next week. However, in the event that the board does decide to go the full 15k-20k and to get rid of staff as soon as possible, Monday could bring Lehman-style box carrying scenes to New York and London.
The equities division will bear the brunt of the cataclysm. In fixed income sales and trading, the future may be brighter. - And in fixed income, Deutsche has been doing some big, big hiring this year.
Hire to fire?
Fixed income headhunters say Deutsche has recruited over 30 credit and macro traders in London in 2019. Most are additions to headcount instead of replacement.
Even at this juncture, people are still arriving.
DB's latest recruits are understood to include Campbell Gilbert, the former head of linear rates derivative trading at Mizuho. Gilbert worked at Deutsche Bank for 15 years until 2015 when he left for Mizuho. Now, he's said to be coming back again.
Tanveer Abbas, a former director in high yield special situations trading at HSBC, is also understood to be joining DB soon.
Deutsche has also recruited at least four emerging market credit traders from Nomura in recent weeks. They follow the arrival of traders like Manav Gupta, Sylvain Lebre and Olivier Gazzolo in London, and Bret Corrigan and Drew Meany in New York earlier this year.
"Deutsche has spent a lot of money hiring in 2019," says one London fixed income headhunter. "A lot of these people are on salaries of €500k plus."
One Deutsche Bank macro trader said the bank's fixed income professionals are being reassured that everything will be fine and there will be no changes on Monday. In the restructured bank, credit trading could reign supreme, leading to the elevation of Ioannis 'John' Pipilis in the post-Garth Ritchie era.
The Financial Times reported today that Deutsche will need to set aside $5bn to cover its restructuring costs. However, the bank is unlikely to pay generous severance packages. - In February this year, DB began paying the statutory minimum to laid off staff in London.
One trader said the proposed bad bank could offer ongoing opportunities for nefarious individuals to make money from DB. "There's a recognized playbook here," he says. "All you do is mark assets down to below their market value and then move to a rival bank or hedge fund so that you can buy them back. When the assets are marked-up again, you make an immediate profit."
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