Deutsche Bank began firing thousands of employees in Asia, Europe and the United States on Monday, moving quickly on at least one part of a strategy meant to arrest years of losses, scandal and decline.
The job cuts, coming hours after the bank announced a "radical" turnaround plan, were a show of decisiveness at the expense of workers and a tacit answer to the question most asked by analysts and investors Monday: Deutsche Bank's plan looks good on paper, but can managers pull it off?
Christian Sewing, Deutsche Bank's chief executive, acknowledged Monday that the bank had failed in the past to follow through on promises to change. As a result, the bank lost money in four of the past five years and will probably report a loss for 2019.
"Some may say you have heard this before," Sewing said during a conference call with journalists. "It is different this time."
Investors appeared unconvinced. Deutsche Bank shares opened higher in trading in Frankfurt, but then gave up the gains and were down around 6% by the midafternoon.
Many elements of the bank's turnaround plan will take months or even years to put in place, including an effort to sequester high-risk assets in a separate unit where they will be sold or retired.
But cutting jobs can be done quickly, at least in countries like the United States and Britain where there are few legal obstacles. So employees felt the most immediate impact of the bank's plan to reverse its fortunes, leading to scenes outside Deutsche Bank offices that recalled those that unfolded during the financial-sector layoffs after the investment bank Lehman Brothers collapsed in 2008.
Although Sewing declined Monday to detail how the cuts, which will ultimately total 18,000 worldwide, would be distributed, they are most likely to be concentrated in New York and London, and in places like Singapore where Deutsche Bank has large investment-banking operations.
Layoff announcements were made to at least two groups at the bank's U.S. headquarters in lower Manhattan. Employees on their way into the building described an office that had been dominated by a sense of foreboding. Around 10 a.m., a group of employees emerged carrying white envelopes containing information about the dismissals. One woman appeared to be crying.
An employee who declined to be identified said that workers had received emails Sunday telling them what time to come in for the announcements. Human resources personnel thanked the employees for their service and said that deciding to make the layoffs had been difficult for the bank, the employee said.
Deutsche Bank plans to entirely eliminate its equity sales and trading division, a unit of the investment-banking division that generated nearly 2 billion euros ($2.2 billion) in revenue last year.
Sewing insisted that Deutsche Bank is not abandoning investment banking, just the businesses that are not profitable. And he said the United States would "remain a core market."
Deutsche Bank, he said, would stick with plans it announced last year to relocate its Manhattan offices from Wall Street to the former Time Warner Center on Columbus Circle. The bank will also proceed with plans to move to a new headquarters in the Moorgate section of London, he said.
But Sewing, a risk management expert who has spent his entire career at Deutsche Bank, clearly wants to set the stage for a new, more sober era focused on serving corporate executives rather than making big bets. Sewing is the first Deutsche Bank chief executive since the early 2000s without an extensive background in investment banking. On Monday, he appeared to repudiate the bank's drive since the late 1990s to compete with American megabanks.
"We lost our compass in the last two decades," he told reporters. "It is my personal purpose to connect this bank with what it used to be."