About 10,000 employees of Deutsche Bank in the US are enveloped in uncertainty with the Bank expected to be merged with Commerzbank. The employees fear that Deutsche Bank may be forced to lay off people or even close down its business in the US. The Bank’s trading and investment banking in the US was already going downhill.
If the merger comes through, the Government of Germany, which has a 15 per cent stake in Commerzbank, will probably retain a stake in the merged business. If this happens, the staff rightly fears that the focus of the bank will shift more to its home market.
With so much uncertainty and the merger process expected to take months to be finalised, significant staff members may look at joining rival banks and hedge funds, which will further affect the already dipping performance of the Bank.
Last year, Deutsche Bank had announced a reduction of approx. 7000 employees globally. This included a 25 per cent cut in trading as well as equities sales positions, with a good number in New York, where it had been underperforming.
However, experts feel that job cuts in Germany will cause stronger political repercussion that in the US. About 5,000 jobs are under threat in Frankfurt alone.
Even if Deutsche Bank decides to retain its US operations, the staff feels that there will be a significant dip in pay and bonuses. Commerzbank, which primary deals in personal and commercial loans, is known to pay its employees less than Deutsche Bank. If the German government ends up retaining a stake, payouts will be controlled.
Deutsche Bank’s equities sales department is already demotivated having received smaller bonuses in 2018.
