Deutsche Bank to put hiring on hold indefinitely
REUTERS/Kai Pfaffenbach/File Photo TPX
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In today's leaked email, Deutsche CEO asked the local COOs to freeze hiring in all offices with an immediate effect. This comes on top of the last week's news of the bank's massive job cuts.

Deutsche Bank's CEO John Cryan sent an email to the bank's Chief Operation Officers announcing the decision to freeze the hiring processes immediately and indefinitely. The details of the email were shared by Reuters in the early morning's coverage from London today. The hiring freeze decision came about as part of a plan to cut all costs possible to cover for Deutsche Bank's recent struggles.

The bank has lost almost half of its market cap this year and watched its shares plummeting 47% to the lowest levels in decades. The main struggle of Deutsche Bank (NYSE: DB) at the moment is the bank's legal dispute with the U.S. Department of Justice over a large $14 billion fine for the sales of mortgage-based securities. Cryan tried to negotiate the amount of the fine with the DoJ during the last month, yet no news about fine deductions have come up by now. The $14 billion fine that is simply too large for the bank to easily pay out raised concerns among investors worrying whether Deutsche Bank will consider raising capital to deal with the allegations. This sent the bank's shares further down the drain.

“Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited. The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts,” Deutsche Bank said in a statement in September.

However, one month later, there are still no confirmed news about the renegotiation of the multi-billion fine. Today's decision to put hiring on hold company-wide doesn't indicate that Deutsche Bank is doing very well though. People familiar with the matter said that the freeze would come in force immediately and would affect all corporate divisions in Deutsche Bank's many international offices, possibly excluding those related to compliance.

Since starting in his role as a Chief Executive Officer, Cryan has made several adjustments to Deutsche Bank's organizational structure aimed at cutting costs. Those included reductions of the top management bonuses and certain assets as well as getting rid of roughly 9,000 jobs. All these decisions were part of the aggressive restructuring plan announced by Cryan in 2015, which includes eliminating up to 35,000 jobs from both internal and external-contracted employees.

The hiring freeze is fitting very well in Cryan's plan. Only last week, the bank has announced to cut an additional 1,000 job in its German offices on top of the 3,000 eliminated jobs in June. According to Bloomberg, the analysts predict that the bank could be able to save more than $2 billion through the hiring freeze, on top of the costs saved through the large workforce cuts.

On the news of the hiring freeze, the shares lost 2.4% this morning and continued the downward direction. Despite the multiple cost-cutting initiatives, the bank has warned the shareholders that it might not close this year with profits.

The Q3 earnings report will be out on October 27.

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