The hold on recruitments is in response to the prospect of a multi-billion-dollar legal penalty.
Deutsche Bank, the German multinational banking and financial services company has reportedly declared a freeze on hiring new staff, amid investor fears that a pending US fine could cripple the bank.
The German lender apparently sent its managers a memorandum about the freeze last week, which probably would not apply to the compliance department responsible for ensuring that the staff abide by the law.
The hold on hiring is the latest in a series of responses by the management to the mounting crisis of confidence rising from the prospect of a multi-billion-dollar legal penalty.
It is being speculated that the bank is currently rethinking elements of its revamp with more decisions likely this quarter, mainly affecting unprofitable business lines.
Last week, Christine Lagarde, the head of the International Monetary Fund, took the unusual step of questioning the bank’s business model, urging it to “decide what size it wants to have” after turbulent weeks in which its share price plunged.
An organisational change, launched in October last year by the then new chief executive, John Cryan, aimed to slash costs by cutting 9,000 staff and overheads, and selling off some non-core businesses.
But even a year down, the staff numbers haven’t reflected much change. Headcount, which stood at more than 101,300 in the middle of this year, is, in fact, higher than the roughly 98,600 last year.
The need to adjust the flagging plan is now being given urgency by a US demand to pay up to $14 billion for the misselling of toxic mortgage securities before the financial crisis.
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