Deutsche Bank fired thousands of employees on Monday during the first round of job cuts for CEO Christian Sewing's dramatic "restructuring" plan that calls for a 20% reduction in the bank's workforce (the elimination of about 18,000 jobs) over the coming years.
Despite the booming economy in the US, observers have pointed out that the laid off DB bankers are facing a tough employment environment in a financial services industry that is contracting. Many will need to shift to entirely new lines of work, something that could require additional job training or - gasp - a return to school.
And as if bouncing back from being laid off isn't hard enough, those who were laid off on Monday, a group that includes some 200 bankers from DB equities business in London, are taking home less money via their 'redundancy' packages than the bank has doled out in the past.
Financial News reports that those who were let go during the first wave of layoffs have received a smaller severance package than DB has historically paid out, according to recruiters and those impacted by the layoffs. Traditionally, DB has paid out a lump sum that amounts to one month's salary for every year of service at the bank.
But employees who were let go on Monday received a one-time payment equivalent to 10% of their salary, along with one week's salary for every year of service.
Though it might seem generous to non-bankers, in London, one month's salary for each year of service is standard for investment banking.
"One month’s salary for every year of service is usual for investment banks," said Philip Landau, founder of Landau Law Solicitors, which advises City executives on employment issues. "This is bog standard, but it varies and investment banks have historically been a lot more generous."
Some lower-level employees were offered hardly anything, or nothing at all, for their severance. And of course, the rollbacks in the bank's severance packages haven't applied to the golden parachutes doled out to departing executives. Former CEO John Cryan, who left the bank in May 2018, received €10.8 million, former COO Kim Hammonds was given €4.86 million when he left the same month, and Marcus Schenck, former co-head of Deutsche’s corporate and investment bank, received €1.95 million when he left.
Here's how much the average DB VP can expect to earn on their way out the door.
Deutsche paid its vice-presidents in investment banking an average of £160,000 last year, according to data from pay benchmarking website Emolument, and £350,000 for those in director-level roles.
Based on these figures, a vice-president who has worked at Deutsche for three years, and who was handed a maximum 10% of salary payment, would have received a total redundancy package worth around £67,000, before taxes, in the latest round.
DB has yet to break out the number of employees it will fire by business line. But FN confimed that at least 200 equities sales and trading staff in the City lost their jobs on Monday, along with a handful of people from the equity capital markets team.
Of course, it makes sense that Sewing sees these 'redundancy packages' as a logical place to start cutting, what with the employees now being 'redundant' and all. But with such a piddling severance, former DB bankers will need to dramatically scale back their lifestyles. In the US, that might mean cancelling a few weekend trips to the Hamptons, or possibly enrolling one's children in public school.