6,400 Deutsche Bank job cull to hit IT

Deutsche Bank is to slash 6,400 jobs worldwide in 2005 as part of a €1.2bn cost-cutting programme that will see further consolidation and outsourcing of its IT infrastructure.

The bank revealed the next stage of its six-month old 'Business Realignment Program' at a trading update this week.

CEO Josef Ackermann outlined a substantial programme of "right-sizing" and "smart-sourcing" in order to increase the bank's market capitalisation through a four per cent revenue growth and 25 per cent pre-tax return on equity.

There will be 6,400 job losses from the restructuring with the majority, approximately 3,700, coming from "infrastructure units" at Deutsche Bank. Around 1,200 jobs will be transferred to more cost-effective locations overseas as part of "smart-sourcing initiatives".

The markets are already speculating that at least 1,000 jobs at Deutsche Bank's London offices will be part of the cull, but the bank has not given any further details of the headcount reduction yet.

Deutsche Bank outsourced part of its European IT function to IBM in 2002 as part of a $2.5bn 10-year deal to slash $1bn in operating costs and further IT cost savings were outlined by Ackermann, including the consolidation of legacy IT platforms.

"We are streamlining our infrastructure. Streamlining our front-office structure opens up opportunities to further optimising our back-office infrastructure," he said. "Our goal is to migrate to a new operating model, which makes full use of outsourcing and smart-sourcing opportunities. In IT, operations and credit risk management, we will gain significant efficiencies from automation of manual processes, and reducing multiple IT platforms."