Since taking over as Deutsche Bank CEO on April 8, Christian Sewing has been doing a lot of traveling and a lot of explaining, looking to boost morale among the bank’s 97,000 worldwide staff.
A couple of weeks ago, on Wall Street, Mr. Sewing and his deputies presided over a “townhall meeting” intended to reassure the bank’s New York staff that they still had a bright future with Deutsche.
The new CEO has already outlined his strategic vision for Europe’s largest bank, but it remains painfully short on detail. Morale is shaky after three years of losses, and three CEOs in six years.
Younger staff at Deutsche Bank are regarded as increasingly headhuntable.
Since the change in leadership, Handelsblatt has had dozens of conversations with Deutsche staff worldwide. The picture that emerges is of an anxious workforce. “The mood is very mixed: it all depends what area you work in,” said one Frankfurt manager. Staff in retail banking take a positive view: before becoming CEO, Mr. Sewing ran that division.
Investment bankers complain of a lack of strategic clarity. Uncertainty hurts, even more than poor results, says one: “There’s just no end in sight, and that damages morale.” The impact has already been felt – in 2017, staff turnover was at its highest since 2010. Younger bankers are assessing their options, say HR consultants and competitors.
The bank is doing everything it can to prevent an exodus. Since Mr. Sewing took over from John Cryan a month ago, executives have addressed more than a dozen large staff meetings like the one in New York. More than 25 emails have gone out to staff, seeking to clarify the situation.
Mr. Sewing enjoys a good reputation, especially among German staff. Many see it as significant that a retail banker, rather than an investment banker, was chosen to lead the giant bank. In Frankfurt, many feel the appointment will strengthen the organization’s German core. Mr. Sewing is very much a company man, who has been with the bank since arriving as a teenage trainee in 1989.
But Mr. Sewing cannot afford to alienate Deutsche’s investment bankers, who bring in the bulk of the company’s earnings. He likes to remind them that he was once a risk manager at Deutsche’s London investment banking operations.
Nonetheless, investment bankers are nervous. On Thursday, Ram Nayak, head of the division, tried to rally his troops, reminding them that in spite of all Deutsche had not lost market share. But he noticeably did not answer the question on everyone’s mind – how many job losses, and where?
In the US business, the mood is grim. It is widely believed that the bank will make cuts to its US trading business; in the meantime, its competitors are making profits and looking to pick off the best staff. “Everyone at Deutsche wants out,” said one US competitor, who says he regularly receives inquiries from Deutsche staff.
With nerves on edge, the bank has begun to respond to rumors: on Wednesday, it publicly denied a Bloomberg report which claimed 20 percent of US staff faced the ax. A US manager was did acknowledge: “Changes at the top can be exhausting for staff.”
The US corporate finance division has sought to bring a little certainty. it has announced the closure of its energy team, costing 70 jobs worldwide, but it has also confirmed seven teams which would be unaffected by the changes. “There are certainly growth opportunities, since the United States is such a big market,” said one executive in the division.
In London, the prospect of Brexit adds another layer of uncertainty, and staff expect many job losses. “But there’s a need for a new start. We have to tackle the structural problems,” said one mid-ranking London executive: “What we really need is a workable business model.” Although the rate of departures from the bank has not increased, people are still being tempted away.
London staff point to the contrasting mood at competitor Barclays, where CEO Jes Staley has publicly defended the investment bank, boosting morale. Even in Germany, where there is considerable loyalty to the firm, younger staff at Deutsche Bank are regarded as increasingly headhuntable. “You have the feeling that the bank is not moving forward, and your prospects are limited,” says one former employee.
The bank knows it has to hold on to its younger staff in particular. “After consolidation, we will give more freedom to staff, promote people and give them responsibility,” promised one senior London executive.
Keeping younger staff is all the more important since Deutsche finds it increasingly difficult to attract talent from competitors. “Ten years ago, Deutsche Bank was a powerhouse in London and by far the biggest European bank in New York. That is simply not the case now,” said Paul Webster, North America boss of headhunters Page Executive.