Deutsche Bank, Germany’s premier investment bank, has seen difficult times arise from financial and regulatory pressures. In February 2018, the German lender reported its third consecutive  annual loss. This situation can be tough for investors to swallow, but the current corporate strategy is one of reduction and refocusing. Hence, a new CEO was named in early April; thousands of jobs have already been cut and areas of emphasis are changing: namely, Deutsche Bank has reduced its U.S. operations and returned to a European-centered business.

Several weeks ago, in late April, Deutsche Bank announced their intent to scale back its U.S. presence. Reports emerged stating that this would occur to the tune of 1,000 U.S. investment banking jobs (10% of U.S. employees). Though Deutsche Bank aspires to maintain its position as a global investment bank, it becomes difficult to see how they retain their stature with a retraction in one of the foremost financial markets. Already failing to properly compete with American banks, the German bank makes their goal appear even loftier with hefty staff reduction. Moreover, as underscored by Deutsche Bank CFO, James von Moltke, in a recent interview with Bloomberg, many prospective employees will likely question joining the firm in such uncertain times.

For anyone looking for new employment within the financial industry and, particularly, current undergraduates undergoing recruiting within financial services, it seems a hard sell to work for Deutsche Bank today. At a time when higher education students, from undergraduates to masters and doctoral students, are increasingly being poached by the allure of Silicon Valley or entrepreneurship, investment banks have taken steps to lock down talent earlier and earlier. Even prominent investment banks like J.P. Morgan and Goldman Sachs have moved their recruiting timeline to over a year before internships or jobs would start. For example, some students will be given offers this May for internships that will begin in June of 2019 - that’s a thirteen month head start on talent acquisition.

Prospective employees in a market reaching full employment might question what DB’s position will look like in thirteen months, when employment formally begins. While Deutsche Bank reports an annual loss for 2017, American banks are posting record earnings and profits, which further gives credence to skepticism around joining DB. Specifically, you might wonder how a bank struggling to stay afloat in great economic times will handle the next recession and how your job could be compromised as a result.

Continued financial and regulatory troubles from annual losses to European and American variations in taxation and financial legislation will affect DB’s balance sheet; they may even necessitate a restructuring that could impact the quality of new hires. Of course, no longer being able to acquire top talent also indicates work performance may falter.  All of this points to difficult times ahead for Deutsche Bank. These challenges could pose a vicious cycle for the German lender, but only time will tell how management changes and refocusing can make or break this nearly 150-year old firm.
Sources: Bloomberg, Reuters, CNN Money, Deutsche Bank