Deutsche Bank to slash thousands of jobs to control costs

New CEO of Deutsche Bank Christian Sewing looks on prior to the annual meeting of the bank in Frankfurt, Germany, Thursday, May 24, 2018.(AP Photo/Michael Probst)
New CEO of Deutsche Bank Christian Sewing is seen through the tele prompter as he speaks at the annual meeting of the bank in Frankfurt, Germany, Thursday, May 24, 2018.(AP Photo/Michael Probst)
FILE - In this Oct. 7, 2016 file photo a flag for Deutsche Bank flies outside the German bank's New York offices on Wall Street. (AP Photo/Mark Lennihan, file)
A sign for a pedestrians stand in front of the Deutsche Bank towers, on the day of the annual meeting of the bank, in Frankfurt, Germany, Thursday, May 24, 2018.(AP Photo/Michael Probst)
FILE - In this April 9, 2018 file photo the bank's logo is seen at a building of Deutsche Bank in Frankfurt, Germany. (AP Photo/Michael Probst, file)
New CEO of Deutsche Bank Christian Sewing, right, and head of the supervisory board Paul Achleitner walk together prior to the annual meeting of the bank in Frankfurt, Germany, Thursday, May 24, 2018.(AP Photo/Michael Probst)
New CEO of Deutsche Bank Christian Sewing speaks at the annual meeting of the bank in Frankfurt, Germany, Thursday, May 24, 2018.(AP Photo/Michael Probst)
FILE - In this Thursday, Feb, 2, 2017 file photo, a traffic sign stands near to the headquarters of Deutsche Bank ahead of the bank's annual press conference in Frankfurt, Germany. Germany’s struggling Deutsche Bank says it’s slashing thousands of jobs as it reshapes its stocks trading business and tries to limit costs. The bank said Thursday, May 24, 2018 it would cut its workforce from 97,000 to “well below” 90,000. (AP Photo/Michael Probst, File)

FRANKFURT, Germany — Deutsche Bank is slashing thousands of jobs as Germany's largest lender refocuses its global investment banking business on Europe and seeks to return to steady profitability.

The bank said Thursday it would cut its workforce from 97,000 to "well below" 90,000 in order to achieve cost reduction targets. It said the reductions were already "underway."

A chief target of the cutbacks is its stocks trading business, mostly based in New York and London. Head count at the equities business is to be reduced by about 25 percent. Those cuts will cost the bank some 800 million euros ($935 million) this year.

The announcement came just hours before Board Chairman Paul Achleitner had to face disgruntled investors at the bank's annual shareholder meeting. The bank's share price has sagged and it paid only a small dividend of 11 euro cents per share last year.

Achleitner drew rueful laughs from the assembled shareholders when he misspoke and said the dividend was 11 euros per share, a mistake he quickly corrected.

Deutsche Bank has struggled with high costs, subpar earnings and troubles with regulators. The bank replaced its CEO in April after three years of annual losses and lagging progress in streamlining its operations.

New CEO Christian Sewing has said the investment banking business would refocus on its European and German customer base and cut back on costlier and riskier operations where it doesn't hold a leading position. Sewing said the bank was committed to international investment banking but must "concentrate on what we truly do well." The new strategy means stepping back from several decades of global expansion in which the bank sought to compete with Wall Street rivals such as Goldman Sachs or JPMorgan Chase.

Sewing replaced John Cryan in April with a mandate to accelerate the bank's wrenching restructuring. It has suffered billions in losses from fines and penalties related to past misconduct. But progress in cutting costs has remained elusive. Sewing on Thursday affirmed the bank's goal to hold costs to 23 billion euros this year and 22 billion euros next year.

Deutsche Bank lost 735 million euros last year after U.S. tax changes cost it 1.4 billion euros. Earnings in the first quarter of 120 million euros were sharply down from the year-earlier quarter.

Addressing an audience of several thousands in Frankfurt, Achleitner said Cryan had "set the ball rolling for fundamental change" but later displayed "shortcomings in decision-making and implementation."

"Dear shareholders, you are right to expect the bank and its management to hit the targets it has set itself," he said. "If there are signs those targets are in jeopardy... then we on the supervisory board have to act swiftly and decisively."

The bank's troubles and the turmoil surrounding Cryan's departure have put pressure on Achleitner as well. Cryan was forced to publicly push back against a media report that Achleitner was looking for a replacement, then left to twist in the wind for days before being shown the door. Achleitner brought Cryan to the bank in 2015 and thus in principle shares responsibility for the bank's strategy and performance since then.

Deutsche Bank shares fell 3.5 percent to 10.53 euros in midmorning trading in Europe.

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