Germany's largest lender Deutsche Bank said Thursday it will cut over 7,000 jobs and dramatically scale back its investment banking activities as it tries to turn the corner on years of losses.
"The number of full-time equivalent positions is expected to fall from just over 97,000 currently to well below 90,000. The associated personnel reductions are underway," a statement said.
A quarter of the jobs in its equities and sales trading business would be hit by the cuts, the bank said.
The jobs cull is the first big decision to be announced under new chief executive Christian Sewing, who unexpectedly replaced CEO John Cryan in early April.
Sewing had already signalled he was planning a drastic shake-up of the bank's cherished but trouble-plagued corporate and investment banking units in a bid to convince investors Deutsche is serious about returning to profitability.
As part of the revamp, Deutsche said it plans to reduce its leverage exposure by over 100 billion euros, or around 10 percent, with the majority of the reduction set to be achieved "by the end of this year".
"We remain committed to our corporate and investment bank and our international presence –- we are unwavering in that," Sewing said in the statement.
"We are Europe's alternative in the international financing and capital markets business. However, we must concentrate on what we truly do well."
The announcements came just hours before the start of Deutsche's annual general meeting in Frankfurt, where management can expect a grilling from shareholders.
The gathering is likely to be a stormy one, with investors expected to vent their anger over the bank's disappointing stock performance, poor earnings results and the turbulent leadership reshuffle.
Former CEO Cryan was unceremoniously ousted last month after coming under growing pressure from leading shareholders and supervisory board chief Paul Achleitner, who accused the Briton of taking too long to get the financial giant back on track after it posted its third straight year of losses in 2017.
Upon taking the reins last month, Deutsche veteran Sewing said the bank urgently needed to slash costs and shift away from its less profitable businesses.
"There is no time to lose as the current returns for our shareholders are not acceptable," the 47-year-old told reporters at the time.
He has vowed to refocus Deutsche Bank on retail banking and asset management, seen as more stable sources of income, while slimming down its share trading and other investment banking activities.
In corporate banking, Deutsche plans to slash its commitment to the United States and Asia, and instead focus more on Germany and Europe.
Other items on Deutsche's restructuring to-do list include fully integrating subsidiary Postbank into its German retail banking operations and further reducing its massive holdings of financial derivatives.
Deutsche on Thursday also said it would step up its cost-cutting drive, aiming to reduce adjusted costs to 22 billion euros in 2019, compared with 23 billion this year.
During his nearly three-year tenure, former boss Cryan was credited with cleaning up most of the toxic legacy of Deutsche's pre-financial crisis bid to compete with global investment banking giants, in part by paying billions in fines and compensation.
But he failed to drag the bank back into the black.
Deutsche even reported a bigger-than-expected net loss of 735 million euros in 2017, which it blamed mainly on US President Donald Trump's corporate tax reform.
By early 2018, unimpressed investors had driven the bank's share price to below half its 2015 level, prompting supervisory board chairman Achleitner to look for a new top manager.
Yet Achleitner has since come in the firing line himself for overseeing years of failed strategies at the bank, and his own future could hang in the balance at Thursday's general meeting.
Shareholder advisor Hermes EOS said in a statement earlier this week that the bank should "start to consider plans for the succession of Paul Achleitner", calling for "more effective leadership and management stability" at Deutsche.