Over the past few months we have witnessed massive cost cutting efforts (ie: firing of bankers) by many firms, Goldman, BAML, Nomura and RBS to name a few. Now it’s time to add Commerzbank to the list of firms that need to fire people in order to try and cut enough costs to maintain earnings.
Germany’s Commerzbank announced that it is cutting more than 100 investment banking related jobs in its New York office as part of its efforts to streamline its operations and boos profitability the WSJ reports, as a sluggish trading environment continues to weigh on profits. The bank announced last year that it was going to bundle investment banking activities in certain locations.
“We are now consequently following this strategy with the realignments of our organizational setup in North America.” said Michael Reuther, head of investment banking operations.
From the WSJ
The current cuts, which were reported earlier by German daily Handelsblatt, affect about 100 back-office and roughly 10 front-office jobs, according to Mr. Reuther’s memo.
As consequence of the cutbacks, Germany’s second-largest lender by market capitalization will outsource the clearing of “non-U.S. commercial payments to” U.S. banks and stop its securities lending as well as structured finance business in the U.S.
Mr. Reuther stressed however that “North America is and will remain an important international hub for Commerzbank” with the New York office being critical for services for U.S. corporate and institutional clients. “We will continue to provide products such as [U.S. dollar] loans and [U.S. dollar] bonds, foreign exchange and other risk-management solutions, as well as equity markets access to our clients,” he said.
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As we say each time more layoffs are announced, the pain is not over and companies will continue to cut labor to the bone in order to try and mask slumping revenues.
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