Deutsche Bank axed more than 20 junior bankers as well as a handful of senior employees this week as dealmaking activity dries up and the German lender prepares for a potential downturn, The Post has learned.
The Tuesday layoffs of workers based in New York were concentrated in the bank’s advisory group, which advises companies about prospective mergers and acquisitions, and origination, which offers loans particularly for mortgages, sources told The Post.
Unlike Goldman Sachs, Deutsche culled a handful of underperformers during the pandemic so bankers have faced some targeted layoffs. Advisory and origination have been hit hardest as investment banking revenue falls as much as 50% across the industry.
But the latest round of cuts represents a belt-tightening that hasn’t been seen in years, sources told The Post. For a younger generation of bankers, it was the first time many have faced layoffs.
“This was a proactive effort to rein things in,” the insider told The Post. “This is a repositioning for where the bank is — it’s about aligning with the market.”
“There was a real shock factor with this round of layoffs,” the insider added. “There are so many people who have never been through a downturn.”
Although a few higher level employees — including several managing directors — were affected, the bank is far more cautious about laying off senior executives.
“It takes 15 years to make a managing director and when the market turns again you need that capacity to ramp up again,” an insider told The Post.
While Deutsche is among the first banks to start cutting people proactively as the economy stagnates, it certainly won’t be the last. Some at Deutsche believe this may just be the first round of layoffs.
“If we get to the end of February and the economy isn’t as good as we hoped, there will have to be additional actions,” the source added.
Deutsche Bank declined comment. The bank will report third quarter earnings next week.
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