German banking giant Deutsche Bank announced Tuesday that it is eliminating 1,900 jobs - including 1,500 at its investment bank - in a move it says would reduce expenses by 350 million euros, or roughly $430 million in U.S. dollars.
The company said that the bulk of the high-paying positions being cut are outside of Germany, though it did not specify where. Deutsche Bank (DB) has about 100,000 employees in 70 countries.
In a news release, Deutsche Bank said the cuts are consistent with its commitment to bring "cultural change" to the banking industry. "As part of a range of measures to bring about a cultural change, the bank is reviewing its compensation practices, in order to address both the absolute level of compensation and the relative balance between rewards for shareholders and those for employees," Deutsche Bank said. "In addition, the bank is reviewing its codes of personal conduct to ensure that they are in line with its long tradition of doing business to the highest standards."
Deutsche Bank is the latest European bank to cut investment banking jobs due to declines in capital markets business. Earlier this year Royal Bank of Scotland cut 3,500 investment banking jobs worldwide,
Banking industry analyst Meredith Whitney said Tuesday that she expects more large global banks - including JPMorgan Chase (JPM), Citigroup (NYSE: C) and Bank of America (BAC) - to shed investment banking jobs as shareholders demand banks to trim expenses to offset the lack of growth . In an interview with Bloomberg Television, Whitney predicted that these banks would cut up to 50,000 capital markets jobs to go along with cuts in their retail banks.
"These banks just aren't earning their cost of capital," Whitney said.
Whitney also said that the "momentum is going against" the larger banks and that she would advise investors to buy stock in less-complex regional banks such as PNC Financial Services Group (PNC), U.S. Bancorp (USB) and even Wells Fargo (WFC).