© Reuters. FILE PHOTO: The logo of Deutsche Bank is pictured on an office of the company in London, Britain July 8, 2019. REUTERS/Simon Dawson
(Reuters) -Deutsche Bank AG has cut staff in origination and advisory segments of its investment banking unit, according to a source familiar with the matter, as a pullback in financing deals compels lenders to rein in costs.
The move was communicated to the U.S. staff on Wednesday, the source said, requesting anonymity as the matter is confidential, calling it an annual exercise to manage the number of bankers without specifying the number of jobs slashed.
Investment bankers were awash with deals in 2021 but have seen few this year as companies halt buyouts and listings amid volatility in the capital markets, tensions between the United States and China, and the Russia-Ukraine war.
The job cuts affected mostly junior bankers, Bloomberg News and the New York Post reported earlier on Thursday.
Last month, Wall Street’s premier investment bank Goldman Sachs Group Inc (NYSE:) said it planned to cut jobs, after pausing the annual practice for two years during the COVID-19 pandemic, a source familiar with the matter told Reuters at the time.
A Deutsche bank spokesperson declined to comment.
The move is a setback for Deutsche, whose investment bank in recent years recovered from being its problem child to its strongest revenue generator thanks to a pandemic trading boom and the deal-making frenzy.
Until recently, senior investment bankers had said they wanted to further expand advisory services. And just last year, Germany’s largest lender began gingerly hiring new staff at its investment bank.
That return to hiring was significant for Deutsche after years of losses, retrenchment and layoffs.
But costs have been an ongoing struggle for Deutsche. In July, it dropped its cost target for the full year.
This year is crucial for the lender and Chief Executive Christian Sewing as he tries to deliver on 2019 targets he set out in a costly overhaul of the bank.
The bank reports third quarter earnings on Wednesday. Analysts expect it to report a ninth consecutive quarter of profit, a notable streak after years of losses.