Deutsche Bank fired 18,000 of its employees in an effort to regain its footing in the global banking sector.
The firm will exit equity sales and trading, but still maintain its U.S. and European equity research teams and equity-capital-markets operations team. However, some are skeptical that the firm will be able to make a profit without their trading arm.
"Whatever the remaining businesses are, they don't make enough money to compete on the global landscape. So, what is the strategic worth of Deutsche Bank? It's not much, in and of itself," said David Hendler, an analyst at Viola Risk Advisors.
Deutsche Bank has been struggling to maintain its position as competitive global bank. Its strongest divisions were credit trading, which tied for first with JPMorgan and securitized trading which tied for third with Citigroup. With their primary trading arm being dismantled, others are looking to see how they leverage their credit trading arm for future success.
"The true test of Deutsche Bank's future is what will happen to its credit trading and foreign-exchange businesses. Those businesses are still strong. How much they are cut will dictate if Deutsche Bank remains a global bank or becomes a regional player," according to a consultant who chose to remain anonymous.
As remaining employees in the firm fear for their job security, investors are looking to see whether Deutsche Bank’s massive job cut will result in growth and steady footing for the firm.